High enthusiasm for polyolefin production at home and abroad will aggravate the contradiction between supply and demand in the future

- Feb 27, 2019-

According to the tracking data of jin lianchuang, by 2019-2020, there will be 6 million tons of PP devices in China, with an increase of nearly 40%. Among them, the devices expected to be put into production in 2019 are zhongan united coal chemical, zhejiang petrochemical, dalian hengli, Inner Mongolia jiutai energy and shenzhen juzhengyuan, with a total production capacity of 2.65 million tons.

The more the more eyes on the corporation refinery, it is not difficult to find one million tons of downstream polyolefin device is fast planning and construction, it is compared with the previous polyolefin market is extremely rare, in terms of shenzhen giant is the source, the first phase of the project on the 600000 tons of PP device, the second phase of 2.1 million tons of polypropylene device in planning, downstream development needs of pluralism, polypropylene usher in a new round of revolution in production.

Aspects of shale gas revolution abroad also gave rise to more and more abundant and cheap ethane PE, PP device onto the horse, which significantly more than the PP, PE and this is because in recent years, as China's own device quickly on extrusion market share, outside dish upside down for a long time, $resources more difficult to have impact on the domestic market price advantage.But China's population base is large, the demand for plastic is more developed in Europe and the United States * there is a certain gap, foreign countries are becoming more and more optimistic about the domestic cake, the emergence of more new device.According to incomplete statistics, from 2019 to 2020, 5.12 million tons of PE and 2.88 million tons of PP are expected to be installed, among which the United States and Russia are highly enthusiastic about the production, while Malaysia and India are the others.

Said to the United States under the attention to the present to talk about our enthusiasm of cooling a trade war with China to crack down on the plastic market, starting from a trade war with China the United States is all made by PE/PP in health tariffs, the G20 summit of shaking hands gave both sides must be moderate, the United States since September 24, imposing a 10% tariff on 200 billion goods, the original plan on January 1, 19 years reprieve levying rose to 25% of the products, and to give remission for 90 days, if not agree, 10% tariff will be up to 25%.The impact of the 10% tariff is limited. Since march, the accumulated depreciation of RMB has exceeded 8%, partially hedging the impact of the tax increase.

From a downstream perspective, China's exports of plastic products continue to rise. For plastic exporters, China's "export dependence" is more than 70% in dongguan, shenzhen, zhuhai and suzhou.For these cities, exports to the us account for about 20 per cent of total exports (some goods pass through Hong Kong into the us).Shenzhen, dongguan and suzhou are the export bases of mechanical and electrical products of * in China. These three cities will face challenges from *.If these products are subject to a 25% tariff, it is expected that the vast majority of Chinese plastic products will completely withdraw from the U.S. market, which will be a staggering loss.

Judging by the actions of both sides, signs of detente have been released, with the 90-day deal giving each other more room and time to maneuver.In the long run, the game between the world's second largest economy and * large economy is a normal and long-term problem, and the game between China and the us in the field of trade has not ended in a broader sense.

Looking back at home, China's economic development is more determined by internal factors, which means that China will make greater market opening, and domestic industries may be impacted. In the long run, introducing more competition will contribute to the upgrading of domestic industries.With the continuous promotion of domestic consumption upgrading strategy, there is a good expansion expectation for the total demand of polyolefin for social consumer goods and other aspects.A trade war between China and the United States will have an obvious impact on China's export enterprises. However, in the medium and long term, relations between major international powers will surely shift from confrontation to coordination.