Trump's tariffs likely to redraw PX trade flows

US President Donald Trump's sweeping new tariffs have provoked dismay, and shocked the global economy. As a result, global industries scrambled and stocks tumbled. It has also dealt a severe blow to PX market. By Apr 9, Asian PX price has dropped a whopping 18.1% from $854/mt on Apr 1 to $699/mt CFR, hitting new low since Jan 2021.

Trump said on Wednesday that he was pausing his new tariffs for 90 days except on China, which he announced he will raise to 125 percent. However, it would still inevitably affect global PX trading.

From the perspective of US PX imports.

Despite the on-again-off-again tariff policy, the current PX-naphtha price spread at around $180-190/mt plus freight cost has made it unviable for plants and traders in Asia to export PX to the US.

The share is calculated based on the exports to the US / total exports of each country or region

Saudi Arabia and Netherlands rely heavily on US to export PX, with the shares at 54% and 69% respectively. Before 2019, China was Saudi Arabia's largest export destination. However, in recent years, China's PX self-sufficiency rate has significantly increased, forcing Saudi Arabia to adjust its strategy. Coinciding with strong gasoline blending demand, U.S. PX import demand surged, leading Saudi Arabia to gradually shift its focus toward the U.S. Similarly, a high proportion of the Netherlands' PX exports also go to the U.S. The difference is that the Netherlands was compelled to find new buyers due to the gradual shutdown of PTA plants in Europe in recent years, which drastically reduced local demand.

South Korea, Brunei, and Taiwan have always had Chinese mainland as their largest export destination. However, influenced by China's rising self-sufficiency and U.S. gasoline blending demand, these regions have also started exporting PX to the U.S. in recent years. Among them, South Korea's export growth has been relatively noticeable. By 2024, shipments to the U.S. already accounted for 7% of its total exports.

Even without the tariff issues, the weakening gasoline blending demand in recent years has gradually narrowed intercontinental arbitrage opportunities for PX. Tariffs have further accelerated this trend. Both Brunei and Taiwan face the same challenge-even a 10% tariff can erase most of their profit margins.

Among the remaining countries, although their export volumes are relatively small, countries like Kazakhstan, France, and Turkey have been exporting PX exclusively to the U.S. However, with Turkey's SASA PTA plant officially commencing operations this year, future PX exports from the country are likely to decline. Once running stably, the facility may even absorb some PX supply from the Middle East. Kazakhstan, on the other hand, has intermittently exported around 65,000 tons of PX since 2019, with shipments showing an upward trend. The newly imposed tariffs could have a more pronounced impact on Kazakhstan.

Overall, after the surge in U.S. gasoline blending demand in 2022, the country gradually became one of the top PX importers, absorbing supplies that were displaced by China's rising self-sufficiency and the shutdown of PTA plant in Europe. However, the new tariffs will undoubtedly disrupt these trade flows, estimated based on U.S. maintains reciprocal tariff policy after the 90-day pause.