Demand robust for polyolefins in China and India

Preliminary estimates show that demand growth has been quite healthy in the two major markets - China and India, as per ICIS. Polyethylene (PE) demand in China (measured as local production plus imports minus exports) rose 13% to 17.4 mln tons while polypropylene (PP) demand increased by 6% to 13.9 mln tons fortifying the country's position as the largest polyolefin consumer and importer in the world. Data from the Chinese customs showed that the country imported 1.384 mln tons of low-density PE (LDPE), 2.478 mln tons of linear-low density PE (LLDPE), 3.495 mln tons of high-density PE (HDPE) and 4.8 mln tons of PP in 2010. Imports of LDPE and LLDPE increased by 3% and 13% respectively while inflows of HDPE dropped by 9% and PP by 6% as local producers expanded their market share following commissioning of new plants. In India PP continued to shine with demand (measured as local sales plus imports minus exports) rising 18% to around 2 mln tons during April-December 2010, according to local industry estimates. Demand for the fiscal year 2010-11 was expected to touch 2.6 mln tons, up from 2.2 mln tons in 2009-10. Raffia and biaxally oriented PP (BOPP) film were the key drivers. PP consumption in each of these two sectors has gone up by over 20% in 2010. New BOPP lines were commissioned; additionally polyester film prices doubled during the year helping BOPP film makers. Rapid expansion of the Indian PP market and introduction of anti dumping measures from Saudi Arabia, Singapore and Oman resulted in a decline in exports and imports. PP exports for April-December 2010 were down 2% to 475,000 tons while imports dropped by about 18% to 250,000 tons. HDPE demand for the year was up by about 7% at 1.1 mln tons while LLDPE rose 9% to 760,000 tons. LDPE was the only exception as high prices and tight supply resulted in demand declining by about 5% to around 250,000 tons during April-December 2010.
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