Tan Jie, Sinopec Maoming Petrochemical Company Research Institute
China’s polypropylene capacity and production expanded rapidly during the 13th Five-Year Plan period, with capacity up from 20.18 million t/a in 2016 to 28.16 million t/a in 2020 and production from 17.69 million tons in 2016 to 25.54 million tons in 2020. The shortage in output and high-end products resulted in large-amounted imports.
Imports grow steadily
China’s polypropylene imports went up steadily during the 13th Five-Year Plan period, from 2016’s 3.0175 million tons to 2020’s 4.5045 million tons, with a YoY growth of 29.04% and annual growth of 10.54% through 2016 to 2020. The import price decreased after a rise, being US$1 167.90/ton in 2016, US$1 278.13/ton
in 2018, US$1 158.58/ton in 2019, and US$1 008.35/ton in 2020. The price in 2020 was down by 12.97% from 2019. The import amount during the 13th Five-Year Plan period was shown in Chart 1.
Chart 1 China’s PP import amounts during the 13th Five-Year Plan period
1. Import origins
China’s major import origins during the 13th Five-Year Plan period were Korea, Saudi Arabia, UAE, India and Singapore, with imports from them reaching 2.1015 million tons in 2016, taking 69.64% of the total; and 2.6185 million tons in 2020, taking 58.13% of the total imports. The YoY growth in 2020 was 28.96%. All major origins and import volumes are in Table 1.
2. Import trade mode
China mainly imported polypropylene via modes of general trade and processing trade during the 13th Five-Year Plan period. The volume of these two modes was 2.5980 million tons in 2016, accounting for 86.10% of the total; and reached 4.0634 million tons in 2020, 90.21% of the total. The YoY growth was 29.47%.
General trade mode brought the most amounts of imports, with 1.4091 million tons in 2016 (46.70% of the total imports) and 2.9977 million tons in 2020 (66.55% of the total), a YoY growth of 44.27%.
Processing trade mode ranked No. 2 in terms of import volume, 1.1889 million tons in 2016 (39.40% of the total imports) and 1.0657 million tons in 2020 (23.66% of the total), a YoY growth of 0.49%.
V-shape of export prices
China’s polypropylene export volume increased stably during the 13th Five-Year Plan period. The export price decreased after a rise, and then stepped up again, being US$1 277.63/ton in 2016, US$1 325.87/ton in 2017, US$1 486.63/ton in 2018, a YoY growth of 12.12%. The price dropped to US$1 377.23/ton in 2019 and then went up to US$1 436.16/ton in 2020, a YoY growth of 4.28%. Chart 2 shows China’s polypropylene export amounts during the 13th Five-Year Plan period.
Chart 2 China’s PP export amounts during the 13th Five-Year Plan period
1. Export markets
Domestic polypropylene was mainly exported to Viet Nam, Japan, Thailand, Indonesia, and China's Taiwan and Hong Kong, etc. during the 13th Five-Year Plan period. The shipments to the previously mentioned markets amounted 163.8 thousand tons in 2016, taking 68.34% of the total exports, and 240 thousand tons in 2020, 66.02% of the total. The YoY growth was 1.05%. Table 2 shows China’s major export markets during the 13th Five-Year Plan period.
2. Export trade modes
General trade was the major export mode during the 13th Five-Year Plan period. The export volume was increasing continuously, being 129.7 thousand tons in 2016 (54.11% of the total export), 256.7 thousand tons in 2020 (70.62% of the total), with a YoY growth of 6.87%.
Conclusions
1. The capacity and production of polypropylene were both expanding during the 13th Five-Year Plan period, so was the import volume. The export amount rose too, with a limited extent though.
2. During the 14th Five-Year Plan period, despite of new projects of Sinopec-SK Wuhan PC, Gulei Refinery, CNOOC Ningbo Daxie, Guangdong PC, Gongguan Juzhengyuan Phase II, Tianjin PC, Oriental Energy (Ningbo) New Materials Phase II, Baofeng Energy, Jinneng Science and Technology, Liaoyang PC, Zhenhai Refinery, Ningxia Runfeng New Materials Technology, Shandong Jingbo PC, Guangxi Refinery and Tianjin Bohai Chemical Industry Group, imports are still in demand due to the shortage of advanced technology and differentiated products.
3. Middle East will still be China’s major polypropylene import origin thanks to the low cost there. The capacities of Korea, India, Singapore and Thailand are expanding steadily, and they will also continue to be China’s import suppliers due to good product quality, restricted local demands, geographical advantages and preferential policies in terms of tariffs. Hence, it is necessary to pay close attention to polypropylene supply-demand situations in these countries.
4. Guangdong, Zhejiang, Shanghai and Jiangsu are China’s main plastics processing bases and thus leading polypropylene importers in the future. General trade and processing trade will still be the major import trade modes.
5. With the upgrading production technology and product quality as well as the reducing prices, China’s polypropylene exports will grow. The growth will not be huge however, as the product brands and applications are still limited. The exports will be mainly shipped from Guangdong, Shanghai, Zhejiang, Jiangsu and Beijing to Viet Nam, China Taiwan, Thailand, China Hong Kong and Indonesia, with general trade as the major mode.
During the 14th Five-Year Plan period, polypropylene imports will still be inevitable to relieve the domestic supply tightness. The technology upgrading, new product development, production cost reduction, transforming from providing products to providing overall solutions, and product differentiation will be China’s polypropylene industry development directions.
