NINE OUT OF CHINA’S top 10 high density polyethylene (HDPE) import partners saw their sales to China fall by an estimated total of $1.8bn in January-July 2023 versus the same period last year. Meanwhile, the remaining member of the top 10, the US, saw its sales increase by $233m.
Asian Chemical Connections
Global HDPE capacity in 2024-2030 would need to be a total of 13m tonnes/year lower than our base case to return to the 2000-2019 operating rate of 88%.
SEE ABOVE estimated LLDPE H1 2023 sales in China versus average H1 1999-2022 sales. Total estimated losses amounted to $594m among some of the big global producers.
GLOBAL PP capacity may have to be a total of 18m tonnes/year lower in 2024-2030 to return operating rates to the historically strong levels
CHINA’S PE demand is heading for 1% growth this year based on the H1 2023. data. Northeast Asian margins would have to recover by 3,423% to get back to normal.
THE PHRASE “pushing on a piece of string” might best describe the logic behind calls for another round of big economic stimulus in China. Any extra money pumped into the economy could be largely saved rather than spent because of weak consumer confidence resulting from an ageing population and the end of the property bubble.
CHINA’S imports from the US surge by 220% in January-May 2023 as local production falls by 11% and as imports decline from Singapore, South Korea and Thailand.
Saudi Arabia and South Korea must find alternative HDPE markets to China, as China’s demand weakens and it becomes more self-sufficient
With China’s demand growth at 1-2% and with complete self-sufficiency possible, PP exports must look to break their China dependence.
Flat 2023-2050 demand growth in China and the developed world would leave the global market for nine synthetic resins 1bn tonnes smaller than the ICIS base case.