Petrotahlil:China’s cumulative PE imports in the first two months of 2019 posted an annual increase of 23% to reach around 2.5 million tons, the highest figure in the statistics dating back to 2001. This added to the ongoing supply length inside the country.
What caused ample supply?
Two major local producers’ inventories have mounted up since mid-February, the end of the Chinese New Year holiday, owing to apathetic demand.
Record amount of total PE imports in January and February also appear to have contributed to the existing supply length.
Feb PE imports lose pace but Jan-Feb total imports still high
China’s February PE imports indicated decreases from January, when the monthly imports hit an all-time high. This was due to thin trading activities amid the Chinese New Year celebrations.
However, cumulative PE imports in the first two months of 2019 were still up in a yearly comparison, suggesting a record-high.
In the January-February period, the country’s total HDPE imports increased by around 13% from a year earlier to reach almost 1.2 million tons.
Saudi Arabia was the top supplier of HDPE to China during this period with a total import of more than 555,000 tons.
Total LDPE imports in the first two months of 2019 posted a yearly increase of 11% to reach 490,000 tons while the main exporter was Saudi Arabia with almost 140,000 tons.
Among all PE products, China’s LLDPE imports posted the highest yearly increase in January-February.
The total LLDPE imports in January-February increased 48% on the year to be reported at around 858,000 tons, with Saudi Arabia standing at the top of the import list with more than 325,000 tons.
Import cargoes piled at ports also add to concerns about length
Chinese players also reported that import cargoes at the ports increased throughout March as several players preferred to delay their deliveries to April so that they can benefit from the VAT cut. The Chinese government reduced the VAT in the manufacturing sector to 13% from 16% on April 1 as part of its renewed attempts at bolstering economy.
In a market where supply is already considered ample, the availability of more import cargoes piled at ports has added further pressure on sellers, some commented.