Chinese PP exports to rise amid self-sufficiency

Chinese polypropylene (PP) exports are set to rise as domestic market challenges intensify, with trade flows shifting toward the high-growth regions of South Asia, Africa and Southeast Asia, according to Feng Shaohua, director/polymers news and research management at S&P Global Commodity Insights, as per Chemweek.

Speaking on Sept. 10 at APPEC 2025 in Singapore, organized by Commodity Insights, Feng said China’s PP exports show a consistent annual growth and are distributed across a diverse set of markets.

“By the end of this year, it is very likely that China will export 3 million metric tons of PP,” he said. According to Platts data, China exported close to 2.5 million metric tons (MMt) of PP in 2024.

China’s capacity has caught up with its significant domestic demand and has surpassed 90% self-sufficiency. As the country’s PP market matures, South Asia, Africa and Southeast Asia are emerging as key growth regions and promising export destinations, Feng added.

The global PP sector’s compound annual growth rate for demand from 2024-29 will be highest in India at about 7.8%, followed by Africa at 6.2%, and Southeast Asia at 5.6%, according to Commodity Insights’ analysts.

China has the lowest PP prices globally, with Southeast Asia near parity. Europe, the US and Brazil face higher and more volatile pricing, opening export arbitrage windows for Chinese suppliers, said Feng.

Platts, part of Commodity Insights, assessed PP injection CFR SE Asia down $5 per metric ton week over week at $840 per metric ton on Sept. 11 while PP injection was also down $5 per metric ton week over week at $870 per metric ton on Sept. 10. PP Homo FAS Houston was stable day over day at $948 per metric ton on Sept. 10.

In 2024, Vietnam imported 16% of China’s yearly PP volumes at 381,000 metric tons, followed at 8% by Indonesia’s 187,000 metric tons, and Peru’s 6% at 156,000 metric tons, Platts data showed.

Sustained growth
Global PP demand is anticipated to experience sustained growth despite downturns and environmental challenges, said Feng.

“PP demand will continue to grow and in the coming 25 years, there will be around 3 million metric tons of additional demand almost every year. This can justify at least five to six world-class polypropylene plants,” he said.

Demographic trends and end-use industries remain key drivers of polyolefins demand over the next two decades, with emerging markets and durable applications as the primary contributors to the demand growth.

Consumer electronics are forecast to have the highest growth over the next two decades at 4.6% CAGR, followed by housewares at 3.7% and personal care at 3%.

The global PP market has been in a downcycle due to overinvestment, said Feng. Between 2022 and 2025, there has been a capacity overbuilt of 10.5 million metric tons per year.

“We are facing an oversupply issue because China invests a lot and they invest more than we need. Because of that, the operating rate has been depressed, but we expect it will slowly recover if we continue business as usual,” said Feng.

Global operating rates are expected to see an uptrend beginning from 2026 at about 77% and eventually reach about 85% by 2034, he said.

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US polyethylene terephthalate market participants continued to digest the US announcement that imports of PET and recycled PET will now be subject to full tariffs in the week ended Sept. 10, as per Chemweek.

The tariffs are effective from Sept. 8. ”There is going to be an immediate impact on imported material,” a source said. “Long term, tariffs are not going to be enough for domestic producers to remain competitive.”

According to market sources, the market remains somewhat confused, as trading activity halted after the tariff announcement.

In previous months, the PET market consistently struggled with low demand due to macroeconomic headwinds and trade uncertainties. However, sentiment has turned bullish, as domestic PET could increase its competitiveness against imported materials after tariffs are applied.

”Virgin PET has a more defined cost structure,” a source said. “Price will increase faster if compared to recycled PET undefined cost structure.”

Market participants will continue to assess the impact of the tariffs the following week. Platts assessed US spot PET price at $1,080/mt (49 cents/lb) DDP US West Coast on Sept. 10, stable on the week, considering market feedback of stable prices in the week as participants digest trade shifts. Platts is part of S&P Global Commodity Insights.

In the domestic market, ongoing negotiations were heard earlier in the week. 2026 adders for contract formula were heard being discussed at the beginning of the week around 0-2 cents/lb.

In Asia markets, some shipments were reported to be on hold, underscoring the immediate disruption. India and China face limited direct impact due to India’s small US market share and China’s long-standing absence from the US market. However, Southeast Asian producers remain heavily exposed, with concerns that redirected cargoes into India could further pressure its already sluggish demand.

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The European chemical and petrochemical industry is in a “poly crisis” caused partly by weak domestic demand and large amounts of capacity being built overseas, according to Julia Schlenz, president/EMEAI at Dow Inc, as per Chemweek.

During a panel session on Sept. 11 at the European Association of Chemical Distributors (FECC) Annual Congress, taking place in Hamburg, Germany, Schlenz said, “we do see a lot of imports coming. Our pie is shrinking.”

Plant rationalization is taking place in Europe, but the amount announced so far remains small relative to global capacity, Schlenz said. “Only 4% of ethylene will be taken out,” she said. “That’s not going to do the trick.”

As result, a recovery in consumer demand is crucial, Schlenz said. “People are not buying so many things anymore,” she said.

The chemical industry needs to be able to adapt quickly. “I urge confidence, courage and creativity — we need to be ready to change, have more agility, be more productive and make some bold decisions,” Schlenz said.

Meanwhile, “bold action” is needed from EU policymakers, particularly since certain pieces of current legislation, and its implementation, have not provided the expected support for the chemical industry, according to Schlenz. They include the Carbon Border Adjustment Mechanism (CBAM) and the EU Green Deal.

“The CBAM, as it is now, isn’t going to work,” she said. “It’s not set up for complex value chains such as the polymers chain. It’s not fit for purpose. And the vision of the Green Deal was a good thing, but then we got lost in meticulous planning of how we get there.”

Other regions, such as China and the US, take a more pragmatic approach to regulation than Europe, according to Schlenz. “They have enabling policies rather than muting policies that put handcuffs on what we’d like to do,” she said.

The weight of EU regulation is stifling potential investments and projects by Dow in Europe, Schlenz said. “We have a lot of plans and ideas, but we lack the business case to do it here,” she said. There are “politically induced” costs in the EU, Schlenz said. “I’d rather use that money for something else,” she said.

Some of those costs stem from the EU emissions trading system (EU ETS), Schlenz said. “It’s driving deindustrialization not decarbonization,” she said. The EU ETS is in need of reform, according to Schlenz. “If we don’t have the enabling circumstances for decarbonization, the EU ETS is a cost,” she said.

In the same panel session, Richard Jenkins, senior vice president and executive committee member at Arkema SA noted that there is “much more alignment” between government and industry in the US than in the EU on “the destination” intended by regulation. “You need to be aligned on the ‘what’ as well as on ‘the how,’” Jenkins said.

China, meanwhile, is “in some ways ahead of Europe” on sustainability, Jenkins said. “They are more advanced on electrification and have a surplus of green energy, he said. “You need to drive scale in decarbonization.”

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The global chemical distribution market will grow at a compound annual growth rate (CAGR) of 2.9% between 2025 and 2030, much slower than the 7.1% CAGR the sector achieved in 2019-24, according to Boston Consulting Group’s (BCG) latest white paper on the chemical distribution industry, which was published on Sept. 11, as per Chemweek.

Presenting some of the findings of the white paper at the European Association of Chemical Distributors (FECC) Annual Congress in Hamburg, Germany, on Sept. 11, Madjar Navah, managing director and partner at BCG, said that the expected slower growth is nevertheless “resilient” and a reflection of the challenging conditions facing chemical producers, and their responses such as the closure of production capacity.

“There is some stagnation going on now,” Navah said. “What’s happening in the chemical manufacturing industry affects what’s happening in chemical distribution.”

Specialty chemical distribution is expected to show greater resilience and higher growth than commodity chemical distribution. BCG forecasts that the specialty chemical distribution market will grow at a CAGR of 3.5% in 2025-30 with the commodity chemical distribution market expanding at a CAGR of 2.5%.

The worldwide chemical distribution market is expected to grow from €398 billion in 2024, to €403 billion in 2025 and €414 billion in 2026, eventually reaching €465 billion in 2030, according to the BCG white paper.

BCG has also carried out FECC’s 2025 “pulse check,” or survey, of its members, which revealed that European distributors’ margins are “now compressed and heavily under pressure,” Navah said. However, improvement is expected with about two thirds of respondents “neutral or optimistic” on margins, Navah said.

The BCG white paper, based on interviews with producers and distributors, also showed that about 71% of producers are willing to outsource to distributors in 2025, down from 77% in 2023 and 84% in 2021. However, the figure for this year is “still high,” and again reflects the current tough market conditions, Navah said.

“Reducing costs is one of the emerging reasons why producers want to outsource to distributors,” he said.

Principals have also become less likely to switch distributors, with the BCG report showing that 52% of producers in Europe and 38% in the US are likely to switch in 2025, compared with 63% and 61%, respectively, in 2023. “This reflects increased satisfaction rates among principals with distributors,” Navah said. Producers are seeking, and getting, more value-added services and expertise from distributors, he said.

However, the FECC survey showed that distributors often feel “caught in the middle” between producers and customers, and under “strong cost pressure from principals,” Navah said.

BCG also identified a “clear role” for distributors in the switch to more sustainable products, although this trend is “uneven” across regions, Navah said. But, overall, about 31% of distributors are actively pushing in 2025 to buy sustainable materials and phasing out fossil-based materials, up from 25% in 2023, according to the white paper.

Meanwhile, BCG believes there will be a “capability transformation” in terms of artificial intelligence in the chemical distribution sector, partly because there is a “big gap” in terms of generative AI acceptance between chemical distributors and chemical producers, Navah said.

Only about 22% of FECC members are actively using or piloting generative AI, according to the association’s survey. But, about 70% of producers said that generative AI will be more relevant to their companies in the coming years, according to the BCG white paper.

The white paper identifies “four imperatives” for chemical distributors to be successful going forward. They are “rewiring supply chains” and abandoning distributors’ traditional linear model; reducing costs in logistics and sales support while investing in capabilities to serve producers better; being able to scale digital capabilities; and “unlocking the people advantage,” focusing on talent, digital skills and organizational agility, Navah said.
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Azerbaijani Energy Minister Parviz Shahbazov and representative of the U.S. Department of State's Bureau of European and Eurasian Affairs Brendan Hanrahan have discussed the prospects for the two countries' cooperation as part of the trade in liquefied natural gas (LNG), oil and petroleum products, the Azerbaijani side said in a statement, as per Interfax.

Investment in the fuel and energy sector and ways to expand regional infrastructure were also on the meeting's agenda.

Specifically, Shahbazov and Hanrahan discussed the possibility of broadening cooperation with ExxonMobil by pursuing new onshore projects, as well as today's state and prospects of the trade in LNG, oil and petroleum products with the United States via SOCAR Trading, the trading business division of State Oil Company of the Azerbaijan Republic, the Energy Ministry said.

In addition, the sides assessed the opportunities for Azerbaijani-U.S. cooperation in renewable energy sources, including green energy corridor projects that would link Azerbaijan with Turkey and Europe via Nakhchivan, Armenia, the Black Sea, and Georgia, also providing Azerbaijan-Central Asia energy links across the Caspian Sea.

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