SINGAPORE (ICIS)--Click here to see the latest blog post on Asian Chemical Connections by John Richardson. There is a lot of focus on US production losses resulting from the severe winter weather and how the losses have tightened markets in the US, Latin America and Europe. Even Asia has also been affected to a lesser extent, as cargoes from the Middle East and Asia that would have stayed within these regions have been diverted.
But consider these statistics. South Korea exported 5m tonnes of paraxylene (PX) to China last year and just 7,000 tonnes to the US with very few exports to Europe and South America. Saudi Arabia sent 62% of all its styrene monomer (SM) exports to China in 2020 with no shipments to either the US or Latin America. What matters far, far more to Asian and Middle East producers than US tight supply is how much closer China moves to self-sufficiency in 2021.
Completing our outlook for Chinese import demand in 2021 across all these products, today's blog examines PX and SM. China’s PX imports could fall by as much as 64% in 2021 over last year with styrene 59% lower. The post also examines the implications for China's major PX and SM trading partners of big declines in imports during 2021.
Chinese demand growth might be better than we have assume and/or new local capacity could be delayed. But it is only a question of time before China moves much closer to self-sufficiency.
Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.