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China commodity chemicals import growth slows

Thu 12 Oct 2017 by Zubair Adam

China commodity chemicals import growth slows

A year-to-date comparison of total China commodity chemicals imports up to August shows they increased year-on-year by 3% to over 25 million tonnes. By comparison, total commodities imports for 2016 were 9% up on those in 2015, suggesting a slowdown in the increase in trade.

Ethylene glycol imports rose the most, by just under 1 million tonnes to 5.8 million tonnes, with increased volumes from the Middle East, Asia, and North America. Paraxylene shipments grew by 11% to just over 9 million tonnes. Benzene imports increased by 79% to 1.7 million tonnes with most of the gains coming from South Korea while other xylenes saw a marginal increase mainly due to gains in ortho-xylene.

All other products saw a fall in volumes with most of the decline being for ethanol which dropped from 557,000 tonnes up to August last year to just 6,000 tonnes so far this year. The import tariffs imposed in January this year have reduced the volumes coming into the country. Methanol volumes dropped by 8% to just under 5.5 million tonnes, in contrast to the large increases we saw between 2015 and 2016 when annual imports for the product surged by 56% to 8.6 million tonnes due to the increasing demand as feedstock from MTO and MTP capacity.

The main reductions in methanol imports were from Oman, Trinidad and Tobago and USA totalling 755,000 tonnes which were offset by increases from Malaysia, Qatar and Iran, reducing the impact by 364,000 tonnes. Styrene imports also slumped by 18%, to just below 2 million tonnes. Some of this reduction may be due to the start-up of 1.2 million tonnes of new capacity last year in China.

Overall, the largest declines in Chinese imports across all commodity chemicals were in supplies from USA, Oman, and Trinidad and Tobago, which fell by a combined 1.4 million tonnes. This was more than offset by an increase in shipments mainly from short sea sources in Asia and the Middle East.

Chinese commodity chemicals exports this year have more than doubled when compared with last year’s shipments, reaching 381,000 tonnes. China is not a major exporter of commodity chemicals but the 2017 year-to-date level figure has already exceeded the annual 2016 total. The major increase in exports was for methanol, which grew more than five-fold from 19,000 tonnes in the first eight months of last year. The most significant rise was to USA with methanol exports this year reaching 54,000 tonnes, from negligible levels last year. The emergence of Chinese methanol exports and the decline in imports has partially come about due to a reduction in demand from MTO and MTP plants due to technical issues and reduced operating rates prompted by lower margins.

The next sizeable increase was for ethanol which grew more than six times from the same period in August last year to 93,000 tonnes with 61% heading to Saudi Arabia and the remainder being shipped to Asia. Ethanol shipments have been encouraged by an export tax rebate and subsidies. Styrene exports also increased to 63,000 tonnes this year, which is much higher than the annual volume last year which was insignificant. Apart from this, acrylonitrile and ethylene glycol saw marginal gains.

Overall Chinese exports have risen mainly to Asia, by a net figure of 107,000 tonnes from 150,000 tonnes last year, and particularly to South Korea. Other significant increases were to Saudi Arabia and USA, by 57,000 tonnes and 54,000 tonnes respectively, from negligible amounts last year.

Based purely on changes in year-to-date trade figures, total China exports of commodity chemicals this year would increase by 119% from 2016, while China imports of commodity chemicals would increase by 3%.


The above is from the Chemical Carrier World service provided by Richardson Lawrie Associates Ltd (RLA), a firm of international maritime economists and business consultants. More information can be found at www.richardsonlawrie.com.

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