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Stats: S Korea shifts focus to alternative export outlets on losing PP, PE market share in China

by Pınar Polat - ppolat@chemorbis.com
by Esra Ersöz - eersoz@chemorbis.com
  • 21/12/2021 (20:54)
As China’s new capacities have caused the buying appetite for import PP and PE to shrink, South Korea has lost market share in its major export destination. Statistics suggest a yearly drop of 13-15% in January-October 2021 while a much larger drop is expected in 2022. Thus, S Korea has started to focus more on alternative export outlets.

ChemOrbis Production News Pro shows that China planned to welcome a total of 9.4 million tons of new PP capacity throughout 2021 while an additional PE capacity of around 3.5 million tons was scheduled to come online.

Players in Southeast Asia markets have already been reporting the presence of competitive offers for South Korean PP and PE lately.

PE exports to Vietnam and Europe shine out

Statistics show that South Korea’s main export PE destination was still China in January-October 2021, forming more than half of the overall exports. Even though they fell 13% to China from last year, overall exports managed to grind higher 3% on year to 2.8 million tons.

Vietnam is the second largest buyer of South Korean PE in the same timeframe with a yearly increase of 18%. A source from a Middle Eastern producer said, “As South Korean sellers are not able to offer to China due to growing capacities and weak demand, they are offering at very low prices to Vietnam with the aim of clearing inventories before the financial year-end.”As a nearby destination, Vietnam will continue to see influx of South Korean PE next year.

South Korea’s third major market for export PE became Belgium with a yearly increase of 66%, followed by Russia with a yearly increase of 41%. Exports to Italy stood in 6th place, showing a substantial increase of 165% on a yearly basis. That is to say, South Korea has ramped up exports to Europe conspicuously. This may be much more evident in 2022, causing competition to heat up among suppliers from the US, the Middle East and S Korea.

S Korean PP finds way to Vietnam and Turkey

As was the case in PE, statistics show that South Korea’s PP exports to China in the first ten months of 2021 retreated 15% from last year. However, China stood as South Korean PP’s major buyer, constituting almost 40% of overall exports. Despite the lost share in China, overall PP exports still rose marginally by 4% to more than 1.8 million tons.

Likewise, Vietnam followed as the second largest buyer of South Korean PP, suggesting a yearly increase of 22% and forming around 14% of the cumulative.

“South Korean suppliers’ offers to Southeast Asia are generally forming the low ends and adding to the bearish sentiment in the regional PP markets,” a Southeast Asian trader said.

Turkey has also become an important destination for South Korean PP as exports rose 10% on year. Turkey is in the third place in the list, having a 10% share in overall exports.

PP, PE exports to North & South America surge due to base effect

When the rise in South Korea’s PP and PE exports to Southeast Asia and Europe is put aside, steep increases are seen in exported volumes to North and South Americas in January-October 2021 due to 2020’s low base effect.

Statistics show that PP exports to the US soared by 75% and to Mexico by 111% while PE exports to Chile and Peru surged respectively by %112 and 132% on year. Although exports to North and South America are currently not big enough, their notable jump addresses South Korea’s growing attention to these destinations.
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