FocusChina’s PE, PP imports set to rise in July-August

02 June 2009 06:11  [Source: ICIS news]

By Chow Bee Lin

SINGAPORE (ICIS news)--Competition is set to heat up in China, the worlds’s largest importer of polyethylene (PE) and polypropylene (PP), as imports are expected to pour in between July and August due to the onslaught of new capacities and the arrival of arbitrage cargoes, industry sources said on Tuesday.

More PP supplies were expected to come from Reliance’s new plant in India, and three recently started up plants in Saudi Arabia, namely Petro Rabigh, Saudi Polyolefins and Natpet, in the third quarter this year, Asian traders said.

Fresh new PE supplies were expected to come from Petro Rabigh and Saudi Ethylene and Polyethylene (SEPC) in Saudi Arabia, they added.

Furthermore, arbitrage cargoes from the Americas and Europe, which were booked in March and April, were expected to arrive in China between mid-July and mid-August, traders said.

China imported over 600,000 tonnes/month of PE from February to April and over 300,000 tonnes/month of PP in March and April, according to China customs data.

These high levels of imports were not seen since early 2000, Chinese traders said, compounding fears that there could be a deluge of supplies heading to the mainland.

Middle East PP supplies made significant inroads in the China market in the first four months this year, with Saudi Arabia ranking third in PP exports, rising from the sixth position for the same period last year, according to China Customs data.

Saudi Arabia exported around 160,782 tonnes of PP to China, over four times more than the 37,316 tonnes imported in the same period last year.

Iran exported 89,511 tonnes of high density PE (HDPE) in the first four months this year, making it the fourth top HDPE exporter to China in this period, the data showed.

Iran exported small volumes, 4,753 tonnes of HDPE to China same time last year, according to the data.

China’s low density PE (LDPE) imports also registered a marked shift in terms of supply origin, as the Former Soviet Union (FSU) almost trippled its exports to 76,647 tonnes, becoming the second top LDPE exporter to China replacing South Korea. FSU was the fourth top LDPE exporter to China same time last year, the data showed.

Increased polymer resin supply is expected to exert downward pressure on prices in China, but concerns regarding rising crude oil prices could provide crucial support, traders added.

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By: Chow Bee Lin
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