Stats: US boosts HDPE market share in China, Saudi's sales slump sharply

The January-July data for China’s HDPE imports suggest that the list of the country’s top suppliers is set to alter in 2023, as the United States has significantly increased its presence in the Chinese market. Although Saudi Arabia remains as the top supplier, the slump in its market share in China appears to have deepened so far this year.

In the first seven months of 2023, China’s top five HDPE suppliers included Saudi Arabia, the United Arab Emirates (UAE), South Korea, the United States, and Iran.  While all suppliers in this list faced decreases in their sales to China year-over-year, the US stood out as it ranked only as the sixth top supplier in the previous year and moved up to the 4th place this year with an outstanding increase.

Imports from US boom: almost 4 times higher than last year

Data reveal that China’s cumulative HDPE imports from the United States showed a staggering spike of 279% from a year earlier in the January-July period to reach a record-high of 356,000 tons.

In 2022, total HDPE imports from the US into China were about 220,000 tons, while this figure has already been far exceeded in the first seven months of this year. If January-July data is annualized, HDPE imports from the US may even surpass 600,000 tons.

Saudi Arabia’s loss is stark, imports at lowest of 7 years

Although Saudi Arabia remains as the top HDPE supplier of China, it has been losing market share since 2020.

In 2019, China imported more than two million tons of HDPE from Saudi Arabia, which represented an all-time record. Saudis sold around 1.9 million tons of HDPE to China in 2020 and 1.3 million tons in 2021. In 2022, the country lost more shares to go below 1.3 million tons.

In the January-July period of this year, the total HDPE imports from Saudi Arabia were significantly down by 27% to reach around 544,000 tons, the lowest cumulative volume since 2016. If annualized, HDPE imports from Saudi Arabia may remain below 1 million tons by the end of 2023, marking the worst performance of 8 years.

Almost all suppliers lose share in China but US

It is not surprising to see China’s mainstream HDPE suppliers including Saudi Arabia, the UAE, Iran, and South Korea lose their sales in a shrinking import market, as China has been adding new capacities over the past few years.

China added around 1 million tons of PE in 2022 while around 3 million tons of new capacity has been added so far this year. Additionally, a significant increase is projected for the following year, with plans to add more than 8 million tons. By the year 2027, it is anticipated that China’s overall PE production capacity will surpass 50 million tons.

As a side note, HDPE imports from the Middle East have seen a notable decrease this year also because the region saw a lot of plant maintenance during the first half of the year.

The United States, on the other hand, has so far been the sole supplier that has managed to increase its share in China’s HDPE market, seizing on its cost advantages to expand exports. US sellers have a competitive advantage over other sources thanks to the low-cost ethane.

Despite China’s diminishing dependency on imports, US PE suppliers have shifted their focus toward the country, especially since late 2022, in response to the rising domestic inventories accompanied by new plant start-ups at home.