In the second half of this year, the Asian PP market was mixed, as the strong demand for downstream medical and packaging applications may be offset by increased supply, a new round of the new crown epidemic and continuing problems in the container shipping industry.
From June to the end of 2021, approximately 7.04 million tons/year of PP production capacity in Asia and the Middle East is expected to be put into use or restarted. This includes China's 4.3 million tons/year capacity and 2.74 million tons/year capacity in other regions.
There are uncertainties in the actual progress of some expansion projects. Taking into account the possible delays, the impact of these projects on the supply in the fourth quarter of 2021 may be postponed to 2022.
Sources said that during the global PP shortage at the beginning of this year, Chinese manufacturers demonstrated the feasibility of exporting PP, which helped increase export channels and increase the market’s acceptance of competitively priced Chinese PP.
Although the long-term opening of China’s export arbitrage windows like February to April is not common, as the pace of capacity expansion accelerates, Chinese suppliers may continue to explore export opportunities, especially for homogeneous polymer commodities.