Polyolefin import and production figures for January-April in China

31-May-10
Polyolefin import and production numbers for January to April from China have been reported in ICIS. The good news is that Chinese demand, measured in terms of imports and local production, has continued to grow. For the period of January-April 2010, low-density polyethylene (LDPE) and polypropylene (PP) demand was up 10% at 1.2 mln tons and 4.4 mln tons. Linear-low density PE (LLDPE) grew at 36% to 1.9 mln tons, high density PE (HDPE) demand expanded by 28% to 2.6 mln tons. Imports of LDPE were up 35% at 638,000 tons, LLDPE rose by 19% to 950,000 tons while HDPE imports increased 9% to 1.27 mln tons. PP imports dropped 7% to 1.35 mln tons as new plant start ups pushed up local production by 20% to around 3 mln tons. Much of the demand growth for LLDPE and HDPE was captured by local production which grew by over 50% for both. The start up of new plants has expectantly started to displace imports- it is likely that Middle East producers and Iranian producers have pushed out the traditional suppliers to the region from South Korea. It is likely that major chunk of production and imports in this period have wound up as inventory and are now being liquidated by traders and even converters. Meanwhile, the turmoil in Chinese markets shows no signs of easing, as buying interest continues to be lackluster. Chinese converters as well as others in the region are not buying on worries that the European crisis will result in a fall in orders for finished goods. Even a 6% reduction in offers and an assurance of "price protection" has not induced South Asian polyolefin buyers to resume purchases.
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