CLAYTON, Mo. - The European Commission has initiated an anti-dumping investigation into imports of epoxy resins from China, the Republic of Korea, Taiwan, and Thailand, following a complaint by the Ad Hoc Coalition of Epoxy Resin Producers. The coalition, which includes Olin Corporation (NYSE: NYSE:OLN), Westlake Corporation (NYSE: WLK), and Spolchemie, alleges that producers from these countries are selling their products in the European Union at unfairly low prices.
The complaint suggests that the dumping margins range from 10% to 170% depending on the country, with China allegedly having the highest margins. The European Commission's inquiry will examine whether such practices have caused material injury to the EU's epoxy resin industry, which is vital for various sectors, including aerospace, automotive, and energy.
The initiation of this proceeding, announced today in the EU Official Journal, could lead to the imposition of additional duties on the imports in question if the investigation confirms the allegations of injurious dumping. Florian Kohl, President of Olin Epoxy & International, commented on the serious impact of what they believe to be unfairly dumped imports on the EU market.
The investigation's success could protect the European epoxy resin industry, enhance job security, and strengthen the EU's economic resilience by ensuring a stable supply chain for critical manufacturing sectors. This action follows similar investigations into unfair trade practices in the United States by the U.S. Department of Commerce and the U.S. International Trade Commission.
Olin Corporation, as a member of the coalition, is a global manufacturer and distributor of chemical products and a leading U.S. manufacturer of ammunition. The information regarding the anti-dumping investigation is based on a press release statement.
In other recent news, Olin Corporation has appointed Deon Carter as Vice President and President of its Chlor Alkali Products & Vinyls division. Carter, with his extensive industry experience, is expected to enhance the company's operational model. He has held various leadership roles in the chemical sector and was previously the Chief Operating Officer of Continental Industries Group.
In financial news, Citi has revised its price target for Olin, reducing it to $64 from $67, while maintaining a Buy rating. Citi's adjustment follows Olin's recent earnings call where the company projected its FY24 EBITDA to exceed $1.3 billion. This is supported by anticipated momentum in pricing and volume for Chlor Alkali Products and Vinyls, and expected improvements in the epoxy business.
On the earnings front, Olin Corporation reported a strong start to 2024 in its first-quarter earnings call. The company expects to achieve $1.3 billion EBITDA this year with improvements in Winchester and Epoxy businesses and anticipates strong demand, particularly in international military.
InvestingPro Insights
In light of the European Commission's anti-dumping investigation, which could have significant implications for Olin Corporation (NYSE: OLN) and its position in the European epoxy resin market, a review of the company's financial health and market performance is particularly relevant. According to recent data from InvestingPro, Olin Corporation has a market capitalization of $5.63 billion, with a P/E ratio that stands at 16.43, reflecting investor sentiment and market pricing of the company's earnings capacity.
InvestingPro Tips suggest that Olin's management has been actively buying back shares, a move that often signals confidence in the company's future performance and value. Additionally, the company is noted for its high shareholder yield, which could be attractive to investors seeking returns in the form of dividends and share repurchases. With the company's strong track record of maintaining dividend payments for 51 consecutive years, this aspect remains a cornerstone of its investment appeal.
Another metric of interest is the company's P/E ratio (adjusted) for the last twelve months as of Q1 2024, which stands at 15.83, slightly lower than the current P/E ratio, indicating a potentially favorable valuation in the eyes of some investors. Moreover, Olin's stock is suggested to be in oversold territory according to the Relative Strength Index (RSI), hinting at a potential rebound or correction in the near future.
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