Long Son Petrochemical seeks import levies on PP, PE to shield Vietnam’s local industry

Long Son Petrochemical has once again petitioned the Vietnamese government to impose import levies on PP and PE, citing the need to protect the domestic industry amid ongoing market headwinds. No further details have been disclosed at this time.

In 2023, the company similarly lobbied for a 3% tariff on imported PP and PE under HS codes 39029090, 39011092, 39012000, and 39014000. However, the proposal encountered strong opposition from industry stakeholders and was ultimately rejected by the government.

A wholly owned subsidiary of Thailand’s SCG Chemical, Long Son Petrochemical operates Vietnam’s sole naphtha cracker, with a nameplate capacity of 950,000 tons/year of ethylene and 400,000 tons/year of propylene. Its downstream operations include a 400,000 ton/year PP line, a 450,000 ton/year HDPE line, and a 500,000 tons/year LLDPE line.

Since 2022, the global petrochemical sector has been navigating a prolonged downcycle, exacerbated by macroeconomic pressures and structural imbalances. Naphtha-based producers, particularly in Asia, have suffered from unfavourable production costs, prompting extended shutdowns and significant operating rate reductions. Long Son Petrochemical, among others, has resorted to extended production stoppage to mitigate financial strain.

In an effort to enhance long-term cost competitiveness, the company has allocated $500 million for the construction of an ethane storage facility at its existing plant. Expected to come online by late 2027, this investment aims to cut feedstock costs by 30%.

Market participants are closely monitoring the potential implications of Long Son Petrochemical’s latest proposal. Currently, Vietnam levies a 3% duty on PP imports from the Middle East, one of its key suppliers, while PE imports remain duty-free across all sources.