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A look back at China’s import polymer markets in Q1

by Pınar Polat - ppolat@chemorbis.com
  • 27/03/2019 (04:53)
As the end of the first quarter is near, ChemOrbis data suggest that PS and ABS prices in China’s import markets are closing the period higher than the early-year-levels. The gains in the PE market were only slight while PP prices failed to firm up. The PVC market, meanwhile, is ending the quarter lower.

ABS gains 10.5% since early 2019

The weekly average data obtained from ChemOrbis Price Index show that the import ABS market has spent the first quarter on a mostly firmer trend, gaining 10.5% since the beginning of this year. With such a gain, the import ABS market has taken the lead and outdistanced all other polymer markets.

During this period, high spot ACN prices and the positive China-US trade outlook were cited as the main supportive factors although demand remained mostly limited to buyers’ needs amid ample supplies.

PS also strong, but not as much as ABS

Import GPPS and HIPS markets have also tracked a stable to firm note in Q1, albeit at a smaller pace than ABS. Data show that import GPPS and HIPS prices have gained 4% since early this year.

Having followed the route of the styrene market, the PS market has mostly found support from suppliers’ lack of sales pressure within this period.

Heading into the second quarter, PS players are now closely monitoring whether the Asian styrene market will continue to fluctuate with high local supplies in China on one hand and the turnaround season across the region in the March-April period on the other hand.

PE stands stable to only slightly firm

Having started 2019 on a mostly steady note, the import PE markets gained ground in the post-Chinese New Year holiday, which corresponded to mid-February. This was with support from four-month high ethylene costs at that time and the lack of sales pressure on the suppliers’ side.

The firming trend faltered after mid-March as thin demand along with two major local producers’ ample supplies have dominated the market recently and sellers’ hike attempts have been mostly encountered with resistance.

Still, the import HDPE, LLDPE and LDPE film markets are up by 1%, 1.4% and 4.5% from early 2019 levels, respectively, ChemOrbis data suggest.

PP mostly steady during Q1

The import homo-PP market has tracked a largely steady trend in the January-March period. Although the fluctuations in the local homo-PP market put pressure on the market from time to time, limited overseas supplies helped prices hover around their early-year-levels.

PVC concludes Q1 on an opposite path

The import PVC market followed a mostly stable to slightly firmer trend until a major Taiwanese producer’s April pricing, which came with significant decreases.

Competitively priced US PVC offers and mostly limited demand were also cited as other factors pulling the market down by mid-March.

Following this, the import PVC market has become the only polymer market closing the first quarter on a soft note and lost 2.3% since the beginning of 2019, ChemOrbis data show.

China’s Jan polymer imports hit all-time high

Data from ChemOrbis Import Statistics suggest that the volume of China’s polymer imports totaled around 2.1 million tons in January, hitting an all-time high on a monthly basis in the import statistics dating back to 2001. This added to the already ample supplies of the domestic producers in the local market.

Trade talks generate optimism among players

China and the US have been negotiating to resolve the eight-month long trade dispute, with two sides being expected to reach an agreement by late April.

Since July last year, the US side has announced tariffs on $250 billion of Chinese goods and China has responded with tariffs on $110 billion of US goods. The scheduled increase in tariffs on Chinese imports was delayed by the US administration in early February, as a result of the ongoing negotiations.

Expectations over two economic giants to meet halfway on a trade deal have generated optimism among market players in the January-March period.

VAT cut for manufacturing sector

The Chinese government’s decision to cut the value-added tax (VAT) rates for the country’s manufacturing sector by 3% to 13% as of April 1 was another important development in the first quarter, which lends hopes for more consumption in the domestic market as of Q2.
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