2023 Global and China PP Trade Flow
Global PP Trade Flow
In terms of global PP trade, trade in Northeast Asia, Southeast Asia and the Middle East is close. The trade between North America and South America is relatively independent, with them mainly exporting PP to each other, while the European region mainly imports goods from North America and the Middle East. China is in the leading position in the global PP supply structure. Its capacity accounts for the first place and its huge domestic consumers make China the major producer and consumer of PP in the world.
In terms of import market, China mainly imported goods from Northeast Asia, Southeast Asia and the Middle East in 2023. A certain European country changed its supply and sales strategy amid the fluctuations in the international situation, and gradually turned to China as a target region to ease its own sales pressure. Thus, China’s PP imports from Europe and the U.S. increased slightly. However, China’s domestic PP capacity developed rapidly in the past five years, with an increase of 16.05 million mt/a, and PP gradually became oversupplied.
China actively explored the export business, laid out markets such as Southeast Asia, and developed raw material export trade, mainly flowing to Southeast Asia. Meanwhile, South Asia and South America also became major destinations for China’s PP exports, due to the gradually rising demand in India, Bangladesh and Brazil. In addition, some export goods flowed to Europe and the U.S., but the number was restricted by high sea freight and long transportation distances.
China PP Trade Flow
China’s PP capacity grew rapidly over the past five years with an average growth rate of 11.42%. Private enterprises, mainly based on refining and integration units and light ends units, developed rapidly. At the same time, the regional distribution of capacity gradually moved towards the coastal areas. Under economic competition, the diversification of feedstock sources continued, and the market competition pattern was further intensified.
According to geographical distribution, China’s domestic PP capacity is distributed in seven regions, including Northwest China, North China, East China, South China, Northeast China, Central China and Southwest China. In recent years, China’s PP capacity expansion gradually transferred to consumption regions, and capacity proportion in various regions changed notably. Over the past five years, newly added capacity in Northwest China was limited, so PP capacity in that region occupied a smaller proportion of the total PP capacity. PP capacity was mainly released in East China, North China and South China this year.
Besides supply, China’s PP demand also advanced over the past five years. In 2023, PP consumption regions were concentrated in North China, East China and South China, where the total consumption of PP accounted for more than 80% of the total by October 2023. The consumption proportion in those three regions decreased, but the consumption volume was supposed to rise by 4.25% Y-O-Y to around 26,900kt/a in 2023. However, compared with the supply in each region, demand was higher, so a lot of goods were transferred to those consumption regions from other regions. The influx of goods brought certain competition for the goods within main consumption regions, suppressing the price there for a short time.
There was a noticeable imbalance between production and sales within the region, as main production regions were not consistent with the main sales regions. Meanwhile, the circulation of PP goods was frequent among major regions. As of now, Northwest China is the largest outflow region, followed by Northeast China. The PP goods mainly flow into the major three sales regions of East China, North China and South China. However, the continuous capacity expansion in these three coastal regions in recent years has whittled down the competitiveness of inflowing goods from other regions, and the competition among regions has gradually intensified.
Remarks: For more details, please contact us for the 2023-2024 China PP Market Annual Report.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
