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 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’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.
China’s ethylene equivalent demand growth in 2022 could be as high as plus 9% or as low as minus 3%
Scenario 1, the ICIS Base Case, for China’s ethylene equivalent demand, sees growth at 9% in 2022 over last year. Scenario 2 involves 4.5% and Scenario 3, minus 3%.
China zero-COVID: 2022 impact on local and global demand for nine major polymers
Instead of demand for the nine polymers growing by 7m tonnes in 2022 under our base cases, my downsides see consumption falling by 6m tonnes.
Global chemicals face negative growth on inflation, more logistics problems and a deep China downturn
SUPPLY-CHAIN problems continue to disrupt the global chemicals and polymer industries more than two years since the pandemic began.
Right now, the centre of attention of supply-chain anxiety is China.
China polyethylene: latest scenarios for 2022 demand and net imports
China’s polyethylene (PE) demand in 2022 could fall by 3% over last year. Net imports may be as much as 3.9m tonnes lower
China’s PP market and Zero-COVID: why 2022 net imports could fall to just 300,000 tonnes
THERE IS NOT MUCH point in carrying out economic stimulus if people can’t spend the extra money. This is the dilemma China faces as it maintains its Zero-COVID policy that it is now affecting some 400m citizens. This makes all the talk in recent weeks of a stimulus-led economic turnaround largely irrelevant.
US domestic PE logistics challenges may create bigger opportunity for other producers in Europe
US PE exports could be restricted in 2022 by local logistics challenges as China’s imports decline as its economy suffers a recession. The centre of attention for Asian and Middle exporters may therefore be Europe.
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