China-Japan tension hits chemical industry

Tensions between Japan and China are beginning to spill over into the chemical industry. China’s Ministry of Commerce announced Jan. 7 the launch of an antidumping investigation into dichlorosilane originating from Japan. The move follows recent signals from Beijing that it may restrict rare earth exports to Japan.Dichlorosilane is an essential material used as a precursor gas for thin-film deposition of polysilicon and epitaxial layers in semiconductor manufacturing. In Japan, Shin-Etsu Chemical and Taiyo Nippon Sanso produce the material, supplying mainly semiconductor applications; China is one of their key export destinations.The Ministry of Commerce says it initiated the investigation into unfairly low prices after reviewing a petition submitted by Tangshan Sanfu Electronic Materials on behalf of Chinese producers. The ministry stated that the petition meets the requirements for opening an antidumping case under Chinese regulations and World Trade Organization rules. Tangshan Sanfu submitted preliminary evidence indicating that imports of Japanese dichlorosilane increased between 2022 and 2024 while import prices fell by 31%, which it alleged caused injury to China’s domestic industry.Financial markets reacted quickly. On Jan. 8, Shin-Etsu Chemical’s share price briefly fell nearly 4%. In response to an inquiry from C&EN, a Shin-Etsu spokesperson says that the company won’t disclose details such as its share of exports to China but that the earnings impact of any future antidumping duties would be limited. Taiyo Nippon Sanso declined to provide specific figures on export ratios or shipments to China.Separately, China announced Jan. 6 that it would strengthen export controls on