FocusChina PP demand slows; 2011 import volumes to fall
18 October 2011 07:05 [Source: ICIS news]
By Amy Yu
?xml:namespace>SINGAPORE (ICIS)--China’s demand for prilled and powdered polypropylene (PP) has been slowing, with the full-year import volumes of the polymer expected to fall while its domestic production will have a moderate increase, industry sources said on Tuesday.
Consumption of the material from downstream industries weakened significantly amid a domestic credit crunch, as China continues with its monetary tightening policy to tame inflation, they said.
China’s demand for PP resins is estimated to grow by 5.7% this year to 16m tonnes, just about a third of the 15.6% growth recorded last year, according to Chemease, an ICIS service in China.
The country consumed 15.2m tonnes of PP in 2010, of which 4.8m tonnes or about 32% were imported, data from Chemease showed. This year, Chemease expects China to take in 3% less PP from abroad at 4.66m tonnes.
Many plastic resins manufacturers and traders in China have reduced their import volumes, partly because of weaker export demand for finished products, industry sources said.
With the country’s major export markets – the US and eurozone – still deep in their respective economic and financial difficulties, demand for China’s finished products is not expected to pick up strongly.
Meanwhile, China's PP output is estimated to rise by 10% to 11.4m tonnes this year, slowing from a 28% increase in output last year at 10.3m tonnes, according to Chemease. Of the total PP output in 2010, China exported 940,000 tonnes, the data showed.
In May-July this year, a shortage of feedstock forced some PP producers in China to run their plants at reduced capacity, contributing to an expected muted increase in the full-year output of the polymer, industry sources said.
The supply of feedstocks ethylene and propylene was low in those months as China’s petrochemical major, Sinopec, cut the operating rates at its naphtha crackers to boost production of other oil products, including diesel, to address a domestic shortage, they said.
China has a PP design capacity of 12.7m tonnes as of last year. This is expected to increase by 12% in 2011 to 14.2m tonnes, industry sources said.
Please visit the complete ICIS plants and projects databaseBy: Amy Yu
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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