Stats: China’s Jan-May PPH exports fall 25%, imports slightly up

China’s homo-PP exports performed well in Q1, with a 12% increase on year and a significant rise of 94% from the previous quarter. Data for April and May, however, came in lower and led to a visible decrease in the total PPH exports for the first five months of the year. As for the imports, the Jan-May data showed a slight increase, which came as a little bit of a surprise.

Vietnam remains top destination for Chinese PP

ChemOrbis Stats Wizard reveals that total homo-PP exports out of China in the January-May period declined 25% on year to reach almost 485,000 tons. Compared to the same period of 2021, they plunged by 34%, as an aside.

Vietnam remained at the top of the PPH export list with around 165,000 tons, followed by Indonesia (91,000 tons) and Bangladesh (89,000 tons).

Exports down amid ‘production cuts versus new capacities’

PP producers in China have been running their plants at significantly lower rates for around one year amidst global demand collapse in the aftermath of the pandemic. The country’s new plant projects, which are huge, have coincided with an anemic post-Covid economic recovery this year, putting extra pressure on domestic producers for run rate cuts at the existing facilities.

China launched a combined 5.8 million tons/year of PP capacity in 2021 and 2022, while it has welcomed around 2.1 million tons/year of capacity so far this year. For the rest of 2023, another 6 million tons/year of new capacity is expected, while the country will continue to increase its domestic production in the years ahead in line with its target of becoming self-sufficient in PP.

Despite the new capacity additions, producers’ continuous efforts to limit the output from installed plants have kept the supply and demand dynamics balanced to some extent in the mainland. That’s to say, suppliers in China may not have been under heavy pressure to sell abroad unless they find export destinations more profitable than the domestic market.

China continues to import PP: its self-sufficiency will not happen overnight

In the meantime, data suggest that China has continued to import PP this year despite its increasing domestic production coupled with a disappointing post-Covid demand recovery.
The country’s homo-PP imports posted a yearly raise of about 4% in the first five months of 2023, suggesting that China’s self-sufficiency in PP will take time to materialize. Although the rise is not remarkable, it is still a bit surprising considering the market weakness since around March.

South Korea was China’s top PPH supplier during the period with more than 277,000 tons, followed by the United Arab Emirates and Saudi Arabia.