China's surging demand led the chemical world out of recession and into boom territory. Its 53% increase in polyethylene (PE) demand between 2008 - 2010 (up 6.2 MT), was typical of the support it provided.
But H1 2011 has not maintained this momentum, as the chart shows. Its PE demand was actually down 2.5% versus 2010:
• Domestic production rose 8% to 5.1MT
• Imports fell 11% to 3.5MT
• Exports doubled to 307KT
Equally, it is becoming more selective about its import partners, as trade data from Global Trade Information Services shows:
• Middle East imports were up 16% at 1.5MT
• SEA were up 10% at 679KT
• NEA were down 20% at 752KT
• NAFTA were down 53% at 293KT
• EU were down 44% at 130KT
Middle East imports would probably have gained extra market share, if Iran had been able to supply. Its volumes were down 18% at 368KT.
Of course, H2 may show some recovery, if the government decides to increase lending again. And in the short-term, there appears to be some tightness building up due to supply issues, particularly LLDPE.
But overall, China's main strategy is to increase its own production, where Sinopec aims to be global No 1 in ethylene by 2014.
It will also maintain the strategic corridor with the Middle East, to ensure energy supplies. But its interest in absorbing surplus production from NEA, NAFTA and the EU is likely to be low.