China: Yet More Record Imports



By John Richardson

The extraordinary China import story continues, raising yet more questions about where all these volumes are going at a time when the government is trying to cool the economy down.

Does this mean that speculation continues apace because of all the money still sloshing around the economy thanks to last year’s record levels of bank lending, and/or that bank lending and the economic stimulus package have created a real growth momentum that policy changes are unable to slow?

What might this mean for inflationary pressures and the danger of more drastic action by the government to control excessive growth?

Or is this data from March very much historic, reflecting the peak of the boom? As my fellow blogger Paul Hodges pointed out yesterday, a steep fall in trading on the Dalian Commodity Exchange has been accompanied by a dip in physical pricing for linear-low density polyethylene (LLDPE).

Here are some of the details of the March import surges, provided by my good contact and friend Jean Sudol of International Trader Publications Inc in New York:

“With the Chinese New Year national holiday over, China’s imports soared in March, with the volume of nearly every major commodity polymer, engineering polymer and organic chemical up from February. Although China’s imports generally pick up each March, the magnitude of the increases this year indicates continued strong demand for many products.

New records were set in March on imports of LLDPE, 273,000 tons, LDPE, 225,000 tons and mono-ethylene glycol (MEG), 689,000 tons. Imports of other products also were heavy, some near record levels: propylene, styrene, methanol, HDPE, EVA, polypropylene, propylene copolymers, ABS, SAN, polyacetals and polycarbonates.

For a number of products, percentage changes for the first quarter of 2010 reflected both the continued strength in demand and low volumes early in 2009. The highest percentage gains for the quarter, between 50%-125%, were on imports of polyacetals, polycarbonates, LDPE and propylene copolymers. Moderate gains, between 12%-18%, were seen on imports of SAN, polypropylene, LLDPE, HDPE, styrene and MEG. Imports were up by 2%-8% for EVA, ABS, propylene and DEG.

First quarter imports of a few products, however, were down sharply from last year, despite increases for most in March. Year to date, imports were down by 19%-87% for benzene, EDC, VCM, methanol and uncompounded PVC. Imports of each of these products had soared to record highs early in 2009, but volumes slowed markedly in the second half of last year and most continued relatively low into 2010. China’s methanol imports were an exception, posting strong gains in both February and March of this year.”

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