China’s September import data shows record high imports of MEG, PC and EVA

30-Oct-09

China’s September import data shows record high volumes of imports of monoethylene glycol (MEG), ethylene vinyl acetate (EVA), polyacetal, polycarbonate (PC). Interestingly, physical and future markets are continuing to show strength, but export and domestic consumption data continues to be weak as per ICIS. Most of these imports were booked in July/August, and could also be part of the stock building exercise before the eight day long break for National Holidays. Some players opine that these volumes are being consumed as China makes gains in specific finished-goods export markets. A depreciated Yuan versus the currencies of other developing countries, raw-material import tax cuts, increased export tax rebates and very flexible labour markets have made China's exports more competitive along with cheap and abundant bank lending. Hence China has seized market share in export sectors including textiles and garments and electronic goods, though it’s finished product exports might be down in value terms. The US Conference Board confidence index indicates failure of US consumers to respond to better equity and housing markets. Hence this added thrift might give the Chinese the ability to cost-cut their way into bigger slices of export markets. However, a weak level of confidence could result in lackluster Christmas sales that could raise inventory levels and result in a large New Year dip in commodity chemical exports to China. US-based International Trader Publications Inc (ITP)’s commodity polymers track in China shows increases were low-density polyethylene (LDPE), linear-low density PE (LLDPE), high-density PE (HDPE), polypropylene (PP), ethylene vinyl acetate (EVA) and propylene copolymers. Polyvinyl chloride (PVC) trended downwards for the third month in row with polystyrene (PS) mixed. Imports of the engineering polymers acrylonitrile butadiene styrene (ABS), polyacetals and styrene acrylonitrile (SAN) also rose, continuing an upward trend that has lasted several months. Imports of ethylene dichloride (EDC), vinyl chloride monomer (VCM), methanol, styrene and propylene were also up from August. MEG reached a new all-time high, but benzene imports remained low.