UZBEKISTAN

IRAN

SAUDIARABIA

INDIA

THAILAND

MALAYSIA

SINGAPORE INDONESIA

PHILIPPINES

TAIWAN

VIETNAM

JAPANCHINA

SOUTHKOREA

QATAR

KUWAIT

New PE contender

ME to SE Asia

ME to China

Existing trade �ow

Expected future trade �ow

India PE toChina & SE Asia

China PP to SE Asia

SE Asia to China

Intra - SE Asia

Polyolefins: Global comPetition intensifies

According to ICIS estimates, about 1.5m tonnes of the shale-based polyethylene (PE) coming out of the US by 2018 is likely to make its way into Asia. This would result in increased competition among these deep-sea and Middle Eastern suppliers.

this icis infographic examines key trends expected to emerge in the global polyolefin markets from 2018 onwards, its impact on polyolefin prices, and implications for middle eastern suppliers.

Us Pe tarGets asia, china scales UP PP ProdUction

north america Pe expansions (2017-2022)Company Capacity (kt/year) Grade, breakdown Location Start-UpDow Chemical 400 ELITE PE Freeport, Texas Q3 2017

Dow Chemical 350 LDPE Plaquemine, Lousiana Q4 2017

Chevron Phillips Chemical 1,000 Bimodal HDPE (500), mLLDPE (500) Sweeny, Texas Q3 2017

ExxonMobil Chemical 1,300 mLLDPE plus LLDPE (2 x 650) Mont Belvieu, Texas End 2017

INEOS/Sasol 470 HDPE LaPorte, Texas Q4 2017

Formosa Plastics 800 HDPE (400), LDPE (400) Point Comfort, Texas H2 2018

Dow Chemical 125 Bimodal HDPE/MDPE Seadrift, Texas; St Charles, Louisiana 2018

Sasol 890 LLDPE (470), LDPE (420) Lake Charles, Louisiana H2 2018 (LLDPE), 2019 (LDPE)

LyondellBasell 500 HDPE LaPorte, Texas Mid-2019

ExxonMobil Chemical* 650 PE (unspecified) Beaumont, Texas 2019

Total/Borealis/NOVA* 625 Borstar PE Bayport, Texas End 2020

Shell 1,600 HDPE/LLDPE (2x 550), HDPE (500) Monaca, Pennsylvania Early 2020s

PTT Global Chemicals* 700 HDPE (2x 350) Belmont County, Ohio 2021 (FID Q4 2017)

NOVA Chemicals* 450 LLDPE Sarnia, Canada 2022

SABIC/ExxonMobil* NA PE unspec (2 units) Corpus Christi, Texas NA

Dow Chemical* 600 PE (unspec) US Gulf Coast 2020s

Dow Chemical* 350 PE (unspec) Various debottlenecks 2020s*No FID yet **Assuming 1,300kt PE for SABIC/ExxonMobil, start-up by 2022

NOTE: Through 2019 = 6.5m tonnes/year. Through 2022 = 12.1m tonnes/year** SOURCE: ICIS

china PP projects Company Start year Capacity

(KTA)

Fujian Zhonjiang Petrochemical 2017 350

Full-Tech Changzou Chemistry & Develop 2017 300

Qinghai Salt Lake Industry 2017 160

Shenhua Ningxia Coal 2017 580

Yunnan Yuntianhua 2017 150

Zhong Tian He Chuang Energy 2017 350

Cnooc and Shell 2018 400

Huating Zhongxu Coal Chemical 2018 200

Fujian Gulei Petrochemical 2019 350

Shanxi Coking Coal 2019 300

Zhongan Lianhe Coal Chemical 2019 350Dongguan Grand Resource Science and Tech 2020 300

Dongguan Grand Resource Science and Tech 2020 300

Hengli 2020 450

Hebei Haiwei Group - 200*

Shenhua Baotou Coal Chem. Industry - 400*

Sinopec/Kpc - 450*

Tianjin Bohai Chem. - 300**Estimated; SOURCE: ICIS

china PP capacity vs consumption 2016 2020

PP capacity (m tonnes) 20 30

PP consumption (m tonnes) 25 31

india tUrns to Pe exPorts

china waste Plastic imPorts ban and imPlications

India – a PE importer until 2017 – is poised to become an exporter from 2018 as it welcomes around 2 million tonnes of new capacity.

Indian PE cargoes are set to compete with material coming out of the Middle East as well as the US from 2018, intensifying competition within the region.

The Chinese government has intensified its environmental or “green” drive this year as part of its commitment to reduce carbon emissions within the Paris Climate Change Agreement, which came into force in November 2016.

In 2016, domestic PE and PP waste output was at 6m-8m tonnes, while total waste supply, inclusive of imports, exceeded 10m tonnes, according to industry estimates.

The import ban is expected to translate to increased demand for virgin polyolefins, which would drive up market prices.

Million tonnes/year

SOURCE: Commerce Ministry of India

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2017-18 (Apr-Jul)2016-172015-162014-15

PE Imports

PP Imports

india PePP imports (million tonnes/year)

china Pe/PP imports

Thousand tonnes/year

SOURCE: Commerce Ministry of India

0

100

200

300

400

500

600

700

800

2017-18 (Apr-Jul)2016-172015-162014-15

PE Exports

PP Exports

india PePP exports (thousand tonnes/year)

india and middle east Pe expansion 2017-2020 Company, Location PE Capacity (kt/year) Start-up

OPaL, Dahei, India LLDPE/HDPE: 720, HDPE: 340 H1 2017

Reliance Industries, Jamnagar, India LLDPE/MLLDPE/HDPE: 550, LDPE: 400 Q3 2017

Hpcl-Mittal Energy (HMEL), Punjab, India PE-Unspecified 1 mill naphtha cracker 2020 or beyond

Kordestan Petrochemical, Sanandaj, Iran LDPE: 300 2017

Petro Rabigh, Saudi Arabia LDPE/EVA: 160 Q3 2017

Sadara Chemical, AI Jubail, Saudi Arabia HDPE/LLDPE: 750, LDPE: 350 Q4 2016/2017

Oman Oil, Liwa, Oman PE: 838 2020

SOURCE: ICIS

Products covered under china import ban on plastic waste

HS Codes* Product description

3915100000

Waste and scrap of ethylene polymer

Aluminium plastic composite film

3915200000 Waste and scrap of styrene polymer

3915300000 Waste and scrap of vinyl chloride polymer

3915901000

Polyethylene terephthalate (PET) waste and scrap materials

Waste PET beverage bottles (brick)

3915909000 Other plastic waste, scrap and scrap waste compact disc crushing material

*refers to harmonized system (HS) classification of goods in international trade; SOURCE: ICIS

Million tonnes/year

SOURCE: China Customs

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4

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10

2017-18 (Jan-Aug)2016-172015-162014-15

PE ImportsPP Imports

USD/tonne

SOURCE: ICIS

600

800

1,000

1,200

1,400

1,600

13-Oct-201721-Oct-2016

LDPE Film CFR ChinaLLDPE Film CFR China

Ethylene CFR Asia NEHDPE Film CFR China

USD/tonne

SOURCE: ICIS

400

600

800

1,000

1,200

1,400

13-Oct-201721-Oct-2016

Flat Yarn (Raf�a) CFR ChinaPropylene CFR Asia NE Assessment

PP Block Co-Polymer, General Purpose CFR ChinaBOPP Film CFR China

bUyer vs seller: the tUG of war on PricesIn 2017, Asian PE and PP prices were largely affected by changes in supply conditions compared with demand, which remained relatively unremarkable.

Relatively high ethylene feedstock prices prompted integrated PE producers to lower their polymer production and sell ethylene for better netbacks.

Buying sentiment in Asia remained weak for much of the year as end-product demand, particularly for flexible packaging, did not perform as well as expected.

Price history charts for china low density polyethylene (ldPe), linear low density polyethylene (lldPe) and high density polyethylene (hdPe) film

Price history chart for china PP yarn and block co-polymer

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BEttER uNdERStANd thE MIddlE EASt PolyolEfINS MARKEt

Veena Pathare is a senior editor manager at ICIS, and covers the Middle East and south

Asian polyolefin and base oils markets, providing price reports and news and generating price

assessments that are considered as key benchmarks for trade in the industry. VEENA PAthARE

SENIoR EdItoR MANAgER

ABOut thE AuthOr

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