Analysis of PP Supply-Demand Fundamentals in East China

Analysis of PP Supply-Demand Fundamentals in East Chinacreases

Highlights

East China is the traditional region with fairish manufacturing industry. With its favorable geographical and transportation environment, the import and export industries are developed. The trade mode of processing and assembling trade provided with raw materials develops maturely, so East China is the largest distribution center for plastic processing and trade. The East China Economic Zone, centered on the Yangtze River Delta, has abundant labor and capital advantages, providing unique conditions for the development of plastic products enterprises and a living space for plastic trading enterprises.

The apparent consumption volume of PP granule in East China was 9,000kt in 2018, but the capacity was only 4,300kt/a. Thus, the supply gap in East China was large, and this region highly depended on import. The trading volume and storage capacity were large. That led financial property of PP in this region to be the highest in China.

East China is the main market for local Sinopec, local enterprises and joint ventures. At the same time, its huge demand volume and coastal port advantages made it become the main inflow area of coal chemicals and imported resources. For PetroChina, East China was the second largest consumption area, but that consumption volume only occupied 8% of the total.

East China region has Wenzhou Cangnan and Pingyang industry clusters represented by PP raffia. Meanwhile, Changzhou market with the largest market volume as well as Ningbo and Hangzhou markets concentrated with petrochemical companies, warehouses and delivery warehouses are located in East China. Besides, many industry clusters are located in East China such as Hefei and Ningbo white home appliance industry clusters represented by copo PP, Wenzhou and Changzhou non-woven industry clusters represented by PP fiber, Jiangsu-Zhejiang-Shanghai modification industry clusters represented by special-purpose PP materials with high fluidity, high crystallization, high shock resistance and low odor, Yuyao and Taizhou injection industry clusters represented by PP injection, Jiangsu and Jiangxi medical equipment industry clusters represented by transparent PP as well as Jiangsu-Zhejiang-Shanghai industry clusters represented by PPR and PPB.

Generally speaking, East China, as the most dynamic economic growth belt in China, will be still the region with the highest utilization rate of funds and resources through its own favorable conditions. And it will also have the strongest demand for China's plastic products and become the most topical and active market in the future.

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