China delays major PP, PE startups as expansion plans hit roadblocks

Data from ChemOrbis Production News Pro reveal that several major PP and PE projects in China, initially slated for launch in 2024, have been delayed to 2025 due to challenging market conditions. These delays underline the struggles of China’s polyolefin markets, which continue to face chronic oversupply, sluggish demand growth, and poor margins.

PP: Nearly half of 2024 capacity additions delayed

China’s strategy to achieve self-sufficiency in PP production and position itself as a net exporter over the next few years has driven a wave of new capacity additions and increasing export activity. However, current supply-demand imbalances have forced some project delays.

China initially planned to add approximately 6.6 million tons/year of new PP capacity in 2024, accounting for 78% of global capacity expansions. However, rising costs and declining margins amid persistent weakness in supply-demand dynamics have resulted in the postponement of nearly half of this planned capacity.

Only 3.55 million tons/year of new capacity was brought online in 2024, with the remaining projects pushed to 2025 or even as far as 2026. This deferral has shifted 2025’s projected new capacity additions to 8 million tons/year.

Although half of 2024 plans are postponed to this year, it is noteworthy to underscore that a big portion of these start-ups can be considered imminent as they are set for the first half of 2025. These projects are expected to exacerbate the current oversupply situation, which continues to weigh on prices and margins:

China’s PP exports surge to record highsChina’s growing self-sufficiency in PP production has significantly reduced import volumes over recent years. According to ChemOrbis Stats Wizard Pro, China’s total PP imports fell to 4.1 million tons in 2023 and are projected to drop further to 3.6 million tons in 2024, marking the lowest level since 2008.On the export side, China sold 2.2 million tons of PP during the first 11 months of 2024, marking an all-time high and a staggering 69% increase compared to the previous year’s total volume. This reflects the country’s aggressive push to establish itself as a major global supplier, leveraging its ample production capacity. Southeast Asia, which is geographically close and has favorable trade agreements with China, remains a key export destination. However, this influx of Chinese-origin PP cargoes is expected to intensify competition in Southeast Asian markets, further pressuring regional prices in 2025.PE: Almost 2 mil tons of new capacity postponedChina’s PE expansion plans have also faced significant setbacks. Of the 3.85 million tons/year of planned PE capacity for 2024, only 1.9 million tons/year came online. The remaining projects were delayed to 2025, pushing the projected capacity additions for that year to 6 million tons/year.This delay comes amidst a backdrop of weak demand, rising costs, and shrinking producer margins. Producers in Asia are increasingly grappling with unviable economics, with some considering plant closures or capacity cuts to survive. The delays may provide some temporary relief to the oversupplied PE market.

Similar to PP, most of the delayed PE start-ups are expected to be online soon within Q1.

Below are the major start-ups currently planned for the first half of 2025:

Producer	Plant - Product	Capacity (ktpa)	Start-up
Shandong Yulong PC	HDPE	300	January 2025
Shandong Yulong PC	HDPE/LLDPE	500	January 2025
Inner Mongolia Baofeng Coal Based New Materials	HDPE/LLDPE	500	January 2025
Shandong Jincheng PC	HDPE	450	March 2025
ExxonMobil (Huizhou) PC	LDPE	500	March 2025
ExxonMobil (Huizhou) PC	LLDPE	730	March 2025
Shandong Jincheng PC	LLDPE	250	March 2025
ExxonMobil (Huizhou) PC	LLDPE	500	March 2025
Inner Mongolia Baofeng Coal Based New Materials	HDPE/LLDPE	500	June 2025
Inner Mongolia Baofeng Coal Based New Materials	HDPE/LLDPE	500	June 2025
Source: ChemOrbis Production News Pro

PE imports mostly stable despite huge capacity additions, unlike PPChemOrbis Stats Wizard data shows that China experienced a steady rise in PE imports from 2017 to 2020, peaking at over 19 million tons in 2020. However, annual imports have since stabilized at around 14–15 million tons, well below the 2020 peak.China’s PE exports have been increasing, meanwhile, particularly since 2022, though the growth is significantly slower compared to PP. Reflecting expanding domestic production, the country’s total PE exports hit a record high of just over 845,000 tons in 2023. By the end of November 2024, PE exports had reached 783,000 tons, and if annualized, the total for 2024 could surpass the previous record, climbing to around 855,000 tons.Oversupply and demand challenges persist in 2025China’s polyolefin markets face tough challenges ahead. With large capacity expansions and slow demand growth, the oversupply problem is likely to worsen in 2025. While some expect prices to temporarily rise in the first quarter due to restocking before the Chinese New Year holiday, many agree that achieving a sustainable supply-demand balance will remain elusive.