Analysis of PP Import and Export in July

According to the China Customs, China imported 324,127 metric tons of polypropylene (PP) in Jul 2022, down 22.56% compared to the same period of last year, but up 3.49% from a month earlier. Of all imports, homo PP imports accounted 213.4kt, down 22.69% compared to the same period of last year; co PP 95.5kt, down 26.21% year-on-year; ra co PP for 15.2kt, up 16.02% year-on-year.

The total export volume of PP in Jul 2022 was about 114.2kt, a year-on-year increase of 67.61%; among which the export of homo PP was about 104.7kt, a year-on-year increase of 74.52%.

From the monthly data, the export volume of homo PP has continued to decrease in the past three months, and the reduction in the past two months has been in the range of 40,000 to 50,000 tons. The main reason is that the price spread between RMB market and PP CFR China market continues to narrow, and the export arbitrage window shrinks or even closes (for example, at the end of July, the RMB price has once exceeded the PP CFR China price).

1. Import (take homo PP as an example)

From the perspective of trading partners, the main sources of imports are South Korea, the United Arab Emirates, Japan and Singapore, with a total import volume of more than 60%, and the ranking has basically remained unchanged in the past three months. Overall, the import situation is relatively stable.

2. Export (take homo PP as an example)

Compared with imports, the changes in exports are relatively obvious, with the top trading partners almost every month. For example, Turkey, which ranked 16th in June, jumped to No. 1 in July; Bangladesh rose from No. 8 to No. 3; while India (from No. 1 to No. 4), Peru (from No. 2 to No. 7), and Brazil (from No. 4 to No. 8).

3. Self-sufficiency rate and import dependency

In 2022, China domestic PP self-sufficiency rate continues to be above 90%, and the highest has reached 95%-96%. The import dependence is also lower than the same period in previous years. The main reason is actually the same, that is, China domestic PP production capacity has expanded rapidly in the past two years, with a growth rate of more than 10%, and it has reached 15%-16% in 2020. The release of production capacity has greatly increased the supply of China domestic PP. General-purpose materials can basically meet China domestic demand, while some high-end materials still need to rely on imports. In 2022, China domestic production capacity will still expand a lot, and the self-sufficiency rate is expected to further increase, while the import dependency may continue to decline.