BLOG: China PP in 2022: either 3.6m tonnes net imports or 500,000 tonnes net exports!!
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.
This will be a year of living dangerously for the global polypropylene (PP) business.
Common Prosperity economic slowdown is combining with further additions to China’s capacity to create a very wide range of outcomes.
As the main chart in today’s post illustrates – – just quite minor changes to demand and operating rate assumptions lead to China either being in a net import position of 3.6m tonnes in 2022 or being a net exporter of 500,000 tonnes
China accounted for some 40% of global net PP imports last year so this really, really matters for your scenario analysis. Like nothing else.
And as northeast PP margins turn negative for the first time since at least 2014, this is a reminder that once container freight supply lengthens, the region will be able to export more of its surpluses.
The much tighter markets in the West would then be under downward pressure. We see petrochemicals inflation in general turning to deflation.
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.