PX Imports Fell Y-O-Y in H1, 2024 and Set to Inch Up in H2
With the rise of China’s “refining-chemical-polyester” full industry chain production model and the upgrading of competition between imported and domestic sources, China’s PX import volume has steadily declined year by year. In the first half of 2024, China’s total import volume was 4,395.8kt, a decrease of 0.97% compared to the second half of 2023 and a decrease of 5.62% compared to the first half of 2023. The self-sufficiency of China’s PX has been further improved. At the same time, South Korea, Japan, Taiwan of China, Brunei and Vietnam are still the main trading partners of China's PX imports.
In the past five years, the import volume of PX in China has shown a rapid downward trend, especially in 2023, when the import volume dropped below 10 million mt for the first time. With the stable production of newly added PX units in China and the further increase in the operating rate of existing PX units, domestic PX production has achieved significant growth in 2024. In the first half of 2024, China’s PX imports were only 4,395.8kt, accounting for 19.49% of the total domestic supply. This change marks the continuous enhancement of China’s self-sufficiency in PX and further promotes the strategic goal of achieving self-sufficiency in the Chinese PX market.
H1, 2024 saw falling PX imports and a stable trade mode.
The monthly import volume of PX in China in 2024 was subject to significant fluctuations. The lowest and highest import volumes in the first half of the year occurred in January and June, respectively. In January, the import volume of PX increased to 867kt, due to the expansion of the supply gap caused by the commissioning of new downstream PTA units and the delayed arrival of some PX import ships. However, in June, there were frequent incidents of production cuts and shutdowns in the PTA market, as well as increased demand for oil blending in the United States and the shipment of MX and PX from Japan and South Korea to the United States. As a result, China’s PX imports fell to 569.1kt.
China’s import trade partners are still concentrated in Asia, with the top five being South Korea, Japan, Taiwan of China, Brunei, and Vietnam. South Korea, Taiwan of China, and Japan are the old major production and marketing regions, accounting for 43%, 18%, and 18% in China’s import share respectively. PX enterprises in these regions give priority to seizing the market by virtue of their capacity base advantages and convenient geographical location. As of June 2024, the monthly average PX operating rate in South Korea decreased to 55.42%, and in Japan it decreased to 42.17%, resulting in a significant decrease in import volume from these regions compared to the second half of 2023.
H2, 2024 is expected to see a loose supply-demand balance and growing PX supply.
From the perspective of supply and demand fundamentals, PX may be in a balanced state in the second half of the year. In July and August 2024, the output loss in Asia has gradually recovered, with domestic PX production rising to over 33kt and import volume expected to be between 700kt and 750kt. The increase in overall supply capacity and the wide fluctuation in demand have caused concerns about the supply and demand prospects. From September to October, there are expectations for some unit maintenance in China, and there may be little change in import volume. Domestic consumption is projected to perk up due to the arrival of the peak season, so the supply and demand pattern may once again turn into a tight balance. From November to December, the operation of domestic PX and PTA units will enter a relatively stable stage, and demand will gradually turn sluggish. Consequently, PX inventory is highly likely to enter the accumulation cycle again.
It is expected that the import pattern in the second half of 2024 will remain similar to the previous period. The overall operating rate of the PX industry in China was at a high level in previous years in July. However, during the peak season of gasoline demand in the United States, some PX from Japan, South Korea, and other regions still flowed to the United States (from July 1st to 20th, the amount of PX shipped from South Korea to the United States was 61kt). It is estimated that China’s average monthly import of PX in the second half of the year is likely to rebound to 700-750kt.
In addition, the output losses in other regions of Asia have generally recovered. Currently, the announced maintenance plans for the third quarter only include the 1,600kt/a unit at CNOOC Ningbo Daxie Petrochemical in China, 720kt/a unit at FCFC in Taiwan of China, 500kt/a unit at Lotte in South Korea, 210kt/a unit at Idemitsu in Japan, and 700kt/a unit at Nghisin in Vietnam, and their maintenance time is concentrated at the end of the third quarter. PTA has good processing space at this stage and the units are also running at a high operating rate. Therefore, the domestic PX market is expected to show a wide balance pattern. In summary, the total import volume in the second half of 2024 is expected to steadily increase, with the average import price weakening. The pattern of import trading partners, delivery and reception places, and trade modes is relatively stable.
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