File photo:VCG

China has launched an anti-dumping investigation into the Polyvinyl Chloride (PVC) imported from the US on Friday, the Ministry of Commerce said. The probe is expected to last a year.

PVC pipes are a petroleum-based product widely used in construction for plumbing and electric cables. The US is one of the world's major PVC producers headed by Formosa Plastics Corporation, Occidental Petroleum and Westlake Chemical Corporation.

Worldwide demand for PVC material has plummeted this year due to the COVID-19 pandemic. If China were to impose a tariff on US PVC business, it could have a knock-on effect on the US petroleum industry, Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times. 

"Industrial manufacturing dropped around 0.8 percent since Trump became president, the sharpest plunge in about ten years," Tian said. "The US economy is counting on the industrial manufacturing sector, including the petroleum industry for a rebound, so if China decides to impose tariff on PCV products it will hurt upstream industries as well."

The US is one of the top suppliers of the PVC materials to China, customs data shows

In April, when production shutdowns and economic shocks caused by the pandemic swept across most parts of the world, the demand for construction PVC materials recorded the lowest level since the 2008 global financial crisis.

US PVC export prices fell 39 percent over six weeks to a 12-year-low of $520 a ton at the end of April, before rebounding to $800 a ton in August.

Global Times