Pakistan plans to impose 37.3% temporary anti-dumping duty, may halt marginalized us pvc trade

According to an announcement issued on July 24, Pakistan has imposed provisional anti-dumping duties of up to 37.3% on imports of suspension-grade polyvinyl chloride (PVC) resin from the United States.

Pursuant to Section 43 of Pakistan’s Anti-Dumping Law, this measure applies to PVC resin originating from the United States and Indonesia and will take effect from the date of publication for a period of four months.

For Westlake Vinyls Company LP, the provisional anti-dumping duty rate is set at 37.3%; for Westlake Vinyls Inc., the rate is 22.28%; for all other U.S. exporters and producers, the rate is 37.3%. Indonesian exporters and producers are subject to a provisional anti-dumping duty of 17.7%.

Market participants indicated that the measure could undermine some of the recent business transactions from the United States to Pakistan, especially since sales to the country are typically conducted through letters of credit.

A trader said: “Pakistan has been very active over the past two weeks. Demand will now come to a standstill, and some Pakistani customers may not open letters of credit and will abandon the purchase volumes they had previously committed to.”

The trader noted that U.S. producers typically require standby letters of credit for sales to Pakistan, and since most of the recent buying interest has emerged only within the past 10 days, some buyers may not yet have opened such standby letters of credit.

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The second trader said that potential trade disruptions should be viewed in the context of existing financing constraints.

A second trader said: “Almost all business there is conducted through letters of credit, but in recent years banks have been reluctant to provide guarantees for those letters of credit. Therefore, you generally need sufficiently high margins to justify that risk.”

Other sources said the impact on US PVC exporters may be limited, as Pakistan is not a major export market for US-produced resin. According to the latest data from the S&P Global Market Intelligence Global Trade Database, over the 12 months through April, US PVC exports to Pakistan averaged only about 3,000 metric tons per month.

A third trader said some buyers had previously built up inventories in advance to avoid the risk of import tariffs, with exports in March reaching 5,600 metric tons, but exports to Pakistan were “not crucial.”

Before the measure was introduced, some traders had reported increased buying interest from Pakistan for U.S. PVC, but market participants said this was unlikely to translate into sustained demand after the anti-dumping policy was implemented.

However, multiple sources pointed out that U.S. goods had already struggled to remain competitive in Pakistan due to shipping costs and competition from regional producers.

A fourth trader active in the U.S. PVC export market said that freight from Houston to Pakistan is about $2,500 per 40-foot container, making it difficult for U.S.-produced resin to compete strongly on price with Asian-origin cargoes.

“I don’t think Pakistan’s new anti-dumping duties will have a material impact on U.S. PVC,” a fourth trader said.