On September 6, China’s MOFCOM issued an affirmative preliminary ruling in its anti-dumping investigation on polyphenylene ether/polyphenylene oxide (PPE or PPO, hereinafter referred to as "PPO") originating in the United States, and announced applicable cash deposit rates ranging from 18.3 percent to 48.6 percent. The comment period is 10 days.

The preliminary ruling, Announcement No. 21 of 2021, found that imported PPO originating in the United States are being dumped in China; the domestic PPO industry has suffered substantial injury; and there is a causal relationship between dumping and injury.

In terms of the specific dumping margins, MOFCOM found dumping margins of 18.3 percent for SABIC Innovative Plastics US LLC, and 48.6 percent for all other American companies, and applied cash deposit rates in those amounts. (SABIC is a Saudi Arabia-based petrochemical maker, and has previously been subject to anti-dumping proceedings from China and others on various products.)

The product in the case, PPO, falls under the tariff line 39072090, and can be used in components and parts in photovoltaics, automobiles, telecommunications, electronic appliances, medical equipment, and other products.

The antidumping investigation was launched on August 3, 2020, in accordance with Articles 16 of China’s Antidumping Regulations, and was extended once in July.

The petition was filed by Nantong Xingchen Synthetic Material Co., Ltd, and was supported by four other companies. The petition claimed that the U.S. PPO was dumped at rates ranging from 196 percent to 255 percent. The petition also claimed there are non-market conditions in the U.S. PPO market, as follows:

Preliminary evidence shows that the U.S. government has played an important role in resource allocation through legislation, industrial policies, the transfer of mining rights for state-owned resources, various supporting measures and others, and has intervened, controlled, and managed the strategic and basic industries such as oil, natural gas, water, electricity, etc. This has resulted in market distortions for the PPO and its raw materials, energy, and etc. Such non-market conditions have resulted in incomparable production costs and prices for PPO in the United States.

MOFCOM conducted surveys on the non-market conditions during the investigation but did not rule on the issue in its preliminary decision.

China also launched a CVD investigation on the same product last year and is likely to announce the preliminary decision in that case soon.