China closes in on net PP exporter status in 2024, but Trump-era tariffs may bite

China's push for petrochemical self-sufficiency since 2019, combined with weak domestic demand, has driven local suppliers to seek new export markets, yet China remained a net importer in 2024, according to latest data from China Customs Statistical Information Center.

In 2024, Chinese PP homopolymer net exports rose for the sixth consecutive year, reaching a record 2.162 million mt, up 88.18% YoY, while net imports fell 12.64% YoY to 2.356 million mt.

Over the same period, Chinese PP copolymer net exports rose for the fourth consecutive year, reaching a record 290,297 mt, up 54.48% YoY, while net imports fell 8.9% to 1.158 million mt.

Will Xu, associate director of polymers at S&P Global Commodity Insights, noted that the weaker Yuan/USD exchange rate which reduced Chinese PP export costs by approximately 10%, and flat domestic prices due to strong capacity expansions, had boosted exports in 2024.

On an ex-works basis, Platts-assessed PP raffia China domestic ex-works prices averaged Yuan 7,518/mt in 2024, nearly flat from 2023 but below the 2022 average of Yuan 8,299/mt. Platts is part of Commodity Insights.

Southeast Asia remains top buyer of Chinese PP homo

Exports to Vietnam and Indonesia grew by 87.02% and 93.37% year over year to 348,139 mt and 176,648 mt, respectively, driven by competitive intra-Asia freight rates and favorable trade agreements.

Southeast Asian market participants are closely monitoring new Chinese capacity additions, expecting further supply pressure in a region already dealing with overcapacity, as several local producers have suspended operations since 4Q24.

Notably, China's PP homo exports to Peru surged 243.06% year over year to 148,046 mt in 2024, which S&P Global's Xu attributes to two new container routes to Latin America, with shipping costs to Peru falling significantly lower than those to Brazil or Mexico.

Asian PP outlook uncertain; hinges on geopolitics

Looking ahead, Commodity Insights forecasts China's overall PP exports to reach 2.5-2.6 million mt in 2025, as capacity continues to increase.

However, Xu noted that the pace of export growth will slow due to Trump-era tariffs and Africa's push for self-sufficiency, with Nigeria's privately-owned Dangote refinery set to add 800,000 mt/year of PP capacity in February.

At the same time, Southeast Asia is expected to remain a key export destination for Chinese PP in 2025, with a trader noting that producers in China "must be prepared for business with Southeast Asia" due to the region's geostrategic importance.

Xu, however, cautions that any anticipated tariff wars, as well as capacity rationalization in Western Europe, Northeast Asia, and Southeast Asia, could affect growth.