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Sharp rise for Chinese polyolefins imports

Sharp rise for Chinese polyolefins imports

Industry News
Release time:
2010/06/18 17:32
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  China’s PE production capacity will likely grow more than 5% a year between 2011 and 2016, but rapidly rising domestic demand means

  The country will continue to import significant amounts of polyethylene and other polyolefins, according to Chinese analysts.

  The country’s PE capacity, for example is expected to hit 13.5 million metric tons in 2016, giving it 14.6% of world capacity; more than double its production in 2006.

  Even with that big jump in domestic production, though, overseas resin will still play a significant role in the country, said Sun Wei Shan, vice-general secretary of the Beijing-based China Petroleum and Chemical Industry Association.

  China is projected to need about 5.4 million metric tons of PE imports in 2016, roughly the same volume as today, he said.

  That figure will represent a much smaller percentage of the total, however, making up only about 30 percent of demand, down from about half today, he said.

  Sun and other Chinese analysts spoke at the Flexpo 2010 conference 9-11 June in Beijing. It was sponsored by Houston-based Chemical Market Resources Inc. and the Beijing-based China National Chemical Information Centre.

  China has been trying to reduce its dependence on imported plastics, and is adding significant capacity of polyolefins.

  Even with that rapid growth, speakers at the conference expressed worries about an anticipated flood of cheap plastic from the Middle East, because of that region’s much lower feedstock costs.

  The analysts, though, said that China’s growing market still afforded opportunities.

  Yu Jiao, vice-director of state-owned polyolefin maker Sinopec’s Economics and Development Research Institute, predicted that domestic spending will start to drive more economic growth, and that will push up plastic demand.

  The Chinese government has said it wants to take measures to boost the average person’s income, after a long period where China has seen personal incomes grow slower than the overall economy, she said.

  The share of overall GDP taken by labour in China fell from 52% in 1997 to just below 40 percent in 2007, Yu said, citing figures from the country’s National Bureau of Statistics.

  Automobiles and housing will remain strong growth markets for the country as it urbanizes, she said.

  China saw a huge jump in PE and PP demand in 2009, up 33% and 22% respectively, because of the Chinese government stimulus spending and other factors, like an unusual drop in the amount of recycled plastic collected and huge restocking that occurred when prices plummeted in 2009, she said.

  But the market is expected to normalise in 2010, and growth for PE and PP consumption is expected to only rise four to five percent, she said.

  Long term, there is plenty of room for growth in China’s polyolefin consumption, as the country’s GDP rises, according to Fang Wei, vice-director of the consulting department at CNCIC.

  China’s GDP is expected to rise 9.5% this year and grow at about 8% a year for the near term, he said.

  China consumes about 5kg of PE per capita annually, and 4.5kg of PP, compared with world averages of 8kg and 5kg, respectively, Fang said.

  In developed economies like North America, Western Europe and South Korea, by comparison, PE consumption is over 30kg a person and PP is between 17 and 25kg, he said.

  “China’s polyolefin consumption market is very promising,” Fang said.

  For PP, the import-export figures are similar.

  Imports are expected to remain at about one-third of the total demand of 18 million metric tons in 2016, but the amount of imported material needed will rise to about 5.8 million metric tons, up from about 3 million metric tons today.




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