BLOG: China threatens to shift global petrochemicals from an inflation to deflation as self-sufficiency increases

ICIS Editorial

19-Apr-2021

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

The global petrochemicals industry has probably never had it so good. Margins are at record highs on a long-term shift in demand to higher levels, the result of the pandemic, and very tight supply.

But the danger the blog has been highlighting since 2014 – which has now reached a critical tipping point – hasn’t gone away. It is Chinese self-sufficiency. China’s self-sufficiency could well move us from a world of petrochemicals inflation to deflation.

In this post, we detail what could be the impact on the global polypropylene (PP) business. China’s net PP imports may this year fall to 4.4m tonnes from 6.1m tonnes in 2020. By as soon as 2026, China could be a net exporter of around 900,000 tonnes.

South Korea, Singapore, Taiwan, the United Arab Emirates and Saudi Arabia – China’s top five trading partners – would struggle to place their volumes elsewhere, given that China accounted for an estimated 43% of global PP net imports in 2020.

It is a similar story in high-density polyethylene and low-density polyethylene through China’s closer relationship with Iran. China can also by itself move close to self-sufficiency in styrene monomer, methanol, paraxylene and ethylene glycols.

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.

READ MORE

Global News + ICIS Chemical Business (ICB)

See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Contact us

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?