BLOG: Major PE exporters to China see their sales fall by a further $1 billion
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.
A further billion dollars of polyethylene (PE) sales in China were lost year-on-year by the major exporters in January-July 2023 versus January-June 2023, according to my latest estimates.
These assessments make use of CFR (cost & freight) China ICIS Pricing assessments and the China Customs’ department’s records – via our Supply & Demand Database – of imports from the big exporters.
Today’s blog breaks these losses down by the grades – high-density PE (HDPE), low-density PE (LDPE) and linear-low density PE (LLDPE).
And the US again emerged as the big winner because of its very low feedstock cost position – ahead of some of the mixed-feed cracker operators in the Middle East.
But the size of US gains has declined. For example, US year-on-year HDPE sales gains in China slipped to $233m in January-July 2023 versus $323m in January-June 2023.
The latest ICIS Northeast HDPE Cost Curve appears to show that nearly all the region’s producers were losing money in the week from 25 August to 1 September 2023. It is a similar story in LDPE and LLDPE.
This year’s average CFR China PE price spread over CFR China Japan naphtha costs remains at the lowest level since our price assessments began in 1993.
China’s average PE demand growth is heading for 1% increase in 2023, comprising a 2% decline for HDPE, flat growth for LDPE and a 4% rise for LLDPE. Total PE demand looks set to be 1.2m tonnes lower than the ICIS Base Case.
Global PE capacity may have to be as much as 23m tonnes/year lower than our Base Case assessment between 2023 and 2030 to bring the market back into good balance.
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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