Q2, 2024 China PX Import Pattern Analysis
The total import volume of China in the second quarter of 2024 was 2,037.2kt, a decrease of 13.62% compared to the first quarter (2,358.4kt), and a decrease of 10.15% compared to the second quarter of last year. The import volumes from April to June were 719kt, 749.1kt, and 569.1kt, respectively. South Korea, Taiwan of China, Japan, Brunei and Vietnam were the top five import trading partners. Zhejiang-based enterprises received the largest amount of imports. General trade remained the most important trade mode.
In the second quarter of 2024, the operating rates of other Asian countries were at low levels. Besides, China’s domestic demand was reduced due to the scheduled and unexpected shutdown of PTA units. Therefore, China’s import volume saw a significant decrease compared to the same period last year, and the overall import price was relatively stable.
In the second quarter, the top five PX import trading partners were South Korea, Taiwan of China, Japan, Brunei and Vietnam. South Korea, Taiwan, China, and Japan are the old major production and marketing export places. In the second quarter, as the maintenance of PX units in South Korea (750kt/a at GS, 700kt/a at Hanwha, and 400kt/a at SK) was fulfilled in a centralized manner, the overall operating rate of South Korea’s PX market dropped to below 60%; In Japan, the overall operating rate fell by 16% from the first quarter, because 770kt/a PX units at ENEOS and 400kt/a unit at Idemitsu were shut down for maintenance; the 700kt/a PX unit at Vietnam’s Nghison also experienced unstable operation. Therefore, China’s PX import volume from South Korea, Japan, and Vietnam fell sharply in the second quarter. However, imports from Taiwan of China and Vietnam saw significant growth because of the geographical advantages of the two markets.
The top five reception places of imported PX in China in the second quarter were Zhejiang, Liaoning, Jiangsu, Hainan, and Guangdong. Among them, Zhejiang Province ranks first due to the stable demand from PTA factories such as Zhejiang Yisheng Petrochemical and Yisheng New Materials; Liaoning Province ranks second due to the large PTA production capacity at Hengli Petrochemical on Changxing Island in Dalian, which is 11.6 million mt/a, and the obvious shortage of raw materials in the Northeast region. In the second quarter, the import of PX in Zhejiang Province decreased by more than 26%, mainly due to output losses in multiple PTA plants such as Yisheng New Materials, Jiaxing Petrochemical, and Formosa Chemical Industrial (Ningbo), which reduced the consumption of PX. Therefore, Zhejiang-based enterprises’ procurement capacity for PX slowed down.
In terms of trade modes, compared with the first quarter, the share of imported and exported goods in processing trade and bonded supervision places has increased, while the share of general trade has shown a downward trend, mainly due to the impact of the national macroeconomic environment and the narrowing of domestic PX demand.
It is expected that the import pattern in the third quarter of 2024 will remain similar to the previous period. The overall operating rate of the PX industry in China increased to a higher level than in previous years in July (as of July 22, the operating rate has reached 85.25%). 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 third quarter 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 1600kt/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 third quarter 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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