BLOG: China goes global in PP perhaps quicker than had been expected, badly disrupting the global industry
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.
Again, please don’t say we didn’t warn you. The main chart in today’s post suggests that under Downside 2, China would swing into a cumulative polypropylene (PP) net export position of 22m tonnes in 2022-2030 from being by far the world’s biggest net importer. We see this as the most likely outcome.
This has been on the cards since 2014 when China said it would push much harder towards petrochemicals self-sufficiency in general.
What seems to have added to the pace of this hugely disruptive turnaround are the zero-COVID policies and the Common Prosperity economic reforms. Despite this year’s local operating rate in line to fall to its lowest level since 2000, 2022 exports could reach 1.7m tonnes, up from 1.4m tonnes in 2021 and just 424,746 tonnes in 2020.
There is a scenario where an increasingly confident Chinese industry plays a significant global role in exports of commodity and perhaps even high-value grades of PP. In such an event, the other major exporters in the Middle East and Asia would need to implement very different strategies from today.
Such are the geopolitical and sustainability uncertainties that many other scenarios are possible. But we see it as essential that the global PP industry gameplans the implications of China becoming a major, perhaps even dominant, global PP player.
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.
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