China PX Braces for Supply Glut amid New Capacity and High Imports
In H1, 2020, ZPC put its 4 million mt/a PX unit into operation. Afterwards, Hengli Petrochemical put its 2.5 million mt/a PTA units into production. As the leading producers in the PET industry, Hengli Petrochemical and ZPC are developing towards the whole industry chain, and they are main contributors in the PX sector in H1, 2020. In H1, 2020, PX output rose by 1.55 million mt, taking up 16.49% of the total output. Though China’s PX capacity rose notably, China’s import volume unexpected rose. So what’s the reason for the increase in imports?
When main import origins reduce their output, other countries will make up the gap.
As the largest PX importer in the world, China mainly imports PX from South Korea, Japan, India, Brunei and Taiwan Province. In H1, 2020, South Korea still ranked first, by virtue of long-term contract users. The import volume from Japan declined, as some units of JX experienced turnarounds. India ranked third, as it had to lift the export to offset local contracting demand amid the public health event. The import volume from Brunei was stable, and it mainly came from Hengyi Petrochemical, who mainly supplied to China’s downstream enterprises. The import volume from Taiwan Province declined from April to June, when Formosa Plastics 3# was under turnarounds. As refining-chemical integration production mode, PX units will suffer sharp loss if they are shut down. Therefore, most PX producers prefer to sell at lows instead of shutdown.
