SEOUL, Jan. 21 (Yonhap) -- South Korea commenced a formal antidumping investigation Thursday into two Japanese firms that manufacture the chemical compound propylene oxide, the country's trade commission said.

The Korea Trade Commission (KTC) said the investigation was started because of complaints filed by SKC Ltd., a local film and petrochemical firm.

The South Korean firm complained that chemical imports from Nihon Oxirane Co. and Toyota Tsusho Corp. had been sold at unfairly low prices, hurting its market share and profits.

"We have determined there is sufficient cause and evidence behind complaints raised by a local manufacturer," the commission under the Ministry of Knowledge Economy said in a press release.

Propylene oxide is a colorless, volatile liquid compound used mostly to make polyurethane plastics. Polyurethane is a key material that goes into the making of plastic-based bathtubs, wash basins and interior furnishings of cars.

It is also used as a clearing agent for preparing biological samples for electron microscopes.

The local market stood at 425.4 billion won (US$373.8 million) in the first nine months of 2009, with 73.8 percent or 314.1 billion worth manufactured locally, and the rest coming from abroad. Japanese imports accounted for 13.6 percent of the overall market.

SKC is the only manufacturer of the chemical, although KPX Chemical and Korea BASF Co. are importers.

Under KTC rules, antidumping probes, which can last for a maximum of 10 months, include on-site inspections. The commission will make a ruling after the probe is completed.

The trade regulatory body, in addition, has ordered a local importer to halt sales of a fishing tackle handling case that violated the design rights of a Japanese company.

It said Baegjo Co, must stop imports of the Chinese-made cases and destroy all unsold products. The cases are an unauthorized copies of products made by Japan's Shimano Inc.

Shimano, a fishing tackle and reel company, asked the KTC to investigate its design infringement claim last October.