THE LATEST DATA on linear low-density polyethylene (LLDPE) China CFR (cost & freight) pricing spreads over CFR Japan naphtha costs underlines the evidence from the other grades of polyolefins, that China is a long way from a full economic recovery.
Asian Chemical Connections
China LDPE demand could fall by as much as 8% this year with net imports 500,000 tonnes lower
CHIINA’S LDPE spreads over naphtha feedstock costs have held up very well this. But this doesn’t mean to say that demand is good. Chinese demand could fall by as much as 8% in 2022.
China’s options for economic revival in 2022 narrow as HDPE demand outlook worsens
My previous best-case outcome for China’s HDPE demand growth in 2022 was 6%. My worst-case scenario was a 3% decline. Now, though, I worry that the best-case outcome for 2022 HDPE demand could be flat or zero growth. My worst-case outcome is a 4% decline.
China may this year become the Asia and Middle East third-biggest PP exporter, replacing Singapore. In 2020, China was nowhere in sight
AS RECENTLY AS 2020, China’s polypropylene (PP) exports totalled just 424,746 tonnes, causing what must have been barely a ripple of anxiety among the major Asian and Middle East exporters. But as the slide below shows, in 2021, China moved into the group of top exporters as its exports surged to 1.4m tonnes. This year, exports could be 1.7m tonnes or higher.
Polyolefins pricing data suggest China still hasn’t recovered
Comparative PE and PP pricing data between Vietnam and southeast asia – and the “spreads” numbers between China PE and PP prices and naphtha costs – suggest the China economy has yet to recover.
Food crisis in 2023 may represent major threat to developing-world polymers demand
High-density polyethylene (HDPE) demand in the developing world in 2023 could contract by 300,000 tonnes, rather than, as in our base case, grow by 800,000 tonnes because of the food crisis.
Assuming all the other regions grew as under our base case, global growth would be 2% in 2023 rather than our base case of 4%.
China naphtha-to-polyolefins spreads data still show recovery yet to happen
RECOVERY? WHAT RECOVERY? Some market players are talking about a rebound in the Chinese economy, and, therefore, polyolefins demand, but the critically important spreads data continue to tell a different story. Nothing has changed from last week.
China 2022 PE demand: latest data point towards a 2% contraction as confusion over outlook builds
January-April 2022 data point towards China’s polyethylene demand for the full year declining by 2% over 2021.
China’s post-lockdown economic rebound has yet to happen, according to the ICIS spreads data
At some point, polyolefins exporters to China and the local producers will regain pricing power. This will become apparent from a widening of spreads as economic activity returns to normal. It really is as simple as this. So, you need our data and analysis.
China PP demand in 2022: Latest data suggest flat growth, down from 4%
In January-March 2022, the ICIS China production estimates plus the net import data from the China Customs department suggested that China’s full-year polypropylene (PP) demand growth would have been be 4%. But the January-April data for this year suggest almost zero growth over last year.
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