EU Anti-Dumping Investigation into 1,4-Butanediol Imports

On April 3, 2025, INEOS Solvents SA lodged a complaint prompting the European Commission to initiate an anti-dumping investigation into imports of 1,4-butanediol (BDO) originating from the People’s Republic of China, Saudi Arabia, and the United States, as published in the Official Journal of the European Union (OJ C_202503135) on June 6, 2025.

This investigation targets a critical chemical used in producing polyurethanes, solvents, and intermediates, with significant implications for professionals in the chemicals supply chain. This blog post outlines the investigation’s scope, its impact on the 1,4-butanediol market, and strategic considerations for stakeholders.

Overview of 1,4-Butanediol and Investigation Scope

1,4-Butanediol (BDO), usually identified by Chemical Abstracts Service (CAS) number 110-63-4 and European Inventory of Existing Commercial Chemical Substances (EINECS) number 203-786-5, is essential for manufacturing tetrahydrofuran (THF), polybutylene terephthalate (PBT), and polyurethane intermediates, with applications in automotive, textiles, and electronics industries. The complaint by INEOS Solvents SA alleges that BDO imports from China, Saudi Arabia, and the United States, classified under CN codes ex 2905 39 26 and ex 2905 39 28 (TARIC codes 2905 39 26 10 and 2905 39 28 10), are being dumped, causing material injury to the EU industry. The investigation, conducted under Regulation (EU) 2016/1036, covers the period from January 1, 2024, to December 31, 2024, with injury analysis spanning January 1, 2021, to December 31, 2024.

The Commission will determine whether exporters from the named countries are selling BDO below normal value and whether these imports are causing injury to the EU industry through price suppression, reduced market share, or decreased profitability. For China, due to significant market distortions, the normal value will be constructed using undistorted prices or benchmarks per Article 2(6a) of the basic Regulation. The investigation is expected to conclude within 15 months, by September 2026, with provisional anti-dumping duties possible within seven to eight months from initiation, around November 2025 to January 2026. Interested parties can access an open version of the complaint for inspection, with submissions on product scope due within 10 days of the notice’s publication (by June 16, 2025).

1,4-Butanediol Market Dynamics and Challenges

1,4-Butanediol is a cornerstone of the global chemicals market, with demand driven by its use in high-performance polymers and solvents. China, Saudi Arabia, and the United States are major BDO exporters, leveraging competitive production costs and, in some cases, alleged subsidies. For instance, China’s chemical industry benefits from strategic support under its Five-Year Plans, potentially distorting prices. EU producers, including INEOS Solvents SA, face challenges from rising energy costs and stringent environmental regulations, which elevate production expenses compared to imported BDO. The alleged dumping has reportedly increased import volumes and suppressed prices, threatening EU producers’ market position and financial performance.

Potential Impacts on the Chemicals Supply Chain

1. Price Volatility: If anti-dumping duties are imposed, the cost of 1,4-butanediol imports from China, Saudi Arabia, or the United States could rise, increasing input costs for EU manufacturers of THF, PBT, and polyurethanes. This may lead to higher prices for downstream products in automotive, textiles, and electronics. Supply chain professionals should monitor BDO price trends, which have shown volatility in North America and Europe due to supply constraints and demand fluctuations, and consider securing contracts to mitigate risks.
2. Supply Chain Diversification: The investigation may encourage sourcing BDO from alternative regions, such as South Korea or EU-based producers. However, shifting suppliers could involve higher logistics costs, longer lead times, and quality assurance challenges, requiring robust supply chain planning. For example, South Korea’s BDO production is reportedly scaling down, limiting options.
3. Regulatory Compliance: Importers and distributors must ensure compliance with potential duties or trade measures. Non-compliance risks penalties or supply disruptions. Interested parties should submit sampling information (e.g., import volumes and turnover) within 15 days of the notice (by June 21, 2025) and engage with the Commission to meet procedural deadlines.
4. Opportunities for EU Producers: Duties could enable EU BDO producers, like INEOS Solvents SA, to regain market share and increase production. However, they must address cost competitiveness, as global oversupply, particularly from China’s expanding capacity, continues to pressure prices.
5. Global Trade Ripple Effects: The investigation could strain EU trade relations with China, Saudi Arabia, or the United States, potentially prompting retaliatory measures. For instance, China has imposed anti-dumping duties on chemicals like ethanolamine from these countries, indicating a pattern of reciprocal actions. Supply chain managers should assess exposure to broader trade disruptions.

Strategic Considerations for Stakeholders

• Monitor Developments: Track updates via EUR-Lex and the Commission’s Directorate-General for Trade. Engage with industry groups to stay informed on investigation progress and potential duties.
• Assess Supply Contracts: Review contracts with BDO suppliers from China, Saudi Arabia, and the United States to gauge exposure to duties. Negotiate flexible terms to adapt to price changes, considering recent North American price surges due to supply constraints.
• Explore Alternative Markets: Evaluate sourcing from non-investigated regions, ensuring quality and cost alignment. Note that global BDO supply is tightening, with South Korea’s reduced capacity and China’s oversupply shaping options.
• Engage in Advocacy: Submit product scope information by June 16, 2025, and sampling data by June 21, 2025, to influence the investigation. Cooperating exporters can request individual dumping margins within 30 days of sample selection.
• Plan for Cost Increases: Budget for potential cost hikes due to duties or supplier shifts. Collaborate with procurement teams to optimize costs, leveraging insights from market reports indicating stable but volatile European BDO prices in Q1 2025.

Navigating the 1,4-Butanediol Market Post-Investigation

The EU’s anti-dumping investigation into 1,4-butanediol imports from China, Saudi Arabia, and the United States, initiated by INEOS Solvents SA on April 3, 2025, and detailed in OJ C_202503135, is a pivotal development for the chemicals supply chain. While aimed at protecting EU producers, it introduces uncertainties that could reshape sourcing strategies, pricing models, and market dynamics. Professionals should proactively monitor developments, diversify supply chains, and prepare for cost increases to navigate this evolving landscape.