Highlights: With the rapid expansion of domestic capacity, the supply of polypropylene (PP) is expected to gradually become ample. In this context, export may gradually become an important direction for domestic companies to respond to fiercer competitiveness and gradually develop market shares. However, the road to the Chinese domestic PP export is full of obstacles, and it needs a longer time to realize large-scale development.
In recent years, with the implementation of the new arrangement for the domestic energy and chemical industry, the production capacity of the olefin industry has continued to expand. As of now, PP capacity exceeds 30 million tons. With the development of refining and chemical integration projects and emerging units represented by PDH units, it is predicted that PP supply will continue to expand quickly in the future. PP capacity is supposed to reach above 50 million tons in 2025, up 78% Y-O-Y. In terms of downstream consumption, it will maintain a positive growth with consumption structure optimized. However, PP supply is predicted to trend to be ample because of a higher growth rate of supply than consumption.
In this context, PP export has become one of the important breakthroughs for companies to deal with competitive pressures and ensure sufficient profits. However, from the current point of view, the export of PP has not yet formed a scale, and still faces many resistance and problems.
Export volume rose steadily but the scale was still limited.
In recent years, PP export volume has kept a positive growth but is still limited. The export volume of PP reached 425.1kt in 2020, merely taking up 1.2% of the apparent consumption volume. China’s exporters mainly include trading companies who aim to arbitrage and risk-avoiding, and international logistics and customs clearance companies. The service targets are still mainly private companies and individuals. Some wholly foreign-owned companies have long-term agreements with overseas companies, and the direction is relatively single. In recent years, although many upstream production companies have tried and explored exports, most of them have made breakthroughs in small orders and have not formed a stable export trend. Relatively speaking, Sinopec has been more active in development in recent years and has significantly improved its exports, but it has not yet formed a large influence.
Current export market situation
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