Strong demand for polyolefins continues in 2021

With strong demand, since April 2020, polyolefins have started an eight-month upward path.

In 2020, the import volume of homopolymer PP (tariff number 39021000) was 4.
5322 million tons, an increase of 29.
80% year-on-year.
Except for the centralized maintenance period of overseas installations from January to April and December, the import volume in other months increased by more than 20% year-on-year.
In the second quarter, due to the backlog of overseas factories, domestic imports increased more passively.
In the third quarter, China became the most demanding region in the world, and the increase in imports turned from passive to active.
The top ten import source countries in 2020 have not changed compared to 2019, but the proportion of Southeast Asia has increased from 31% to 36%.
Among them, Vietnam, India and Malaysia have increased their PP exports to China due to new installations.

In 2021, 82% of the newly added PP production capacity overseas will be concentrated in Asia.
However, since half of the installations were put into production in the second half of the year, the demand in other regions has rebounded after the epidemic has resumed, and the import volume in 2021 is conservatively estimated to be 3.
6 million tons.

On the demand side, the apparent demand growth rates for PE and PP were 13% and 9%, respectively.
In 2021, polyolefin production capacity will continue to expand at a high speed.
It is estimated that PE will add 5.
7 million tons of new capacity, corresponding to the new output of 3 million tons, and the capacity growth rate will be 24.
83%.
PP added 4.
6 million tons of new production capacity, corresponding to 3.
36 million tons of new production, with a capacity growth rate of 16.
31%.
Affected by the epidemic, overseas polyolefin demand will decline in 2020, and excess production will be transferred to China, resulting in a record increase in imports.
After the recovery of overseas demand in 2021, domestic polyolefin imports will no longer maintain rapid growth.
It is expected that domestic PE imports will exceed 20 million tons, while PP imports will drop to 3.
96 million tons.
In the end, the apparent demand growth rate of PE is greater than that of PP for the sixth consecutive year.

　　C Significant changes in the demand structure

　　A series of changes in the consumption pattern, such as the upgrading of consumption concepts, the promotion of consumption policies, the popularization of environmental protection, and the rise of online sales, have caused the main consumption areas of polyolefins to shift from film and plastic woven (drawing) made of standard products to non-standard products.
Injection molding, fiber and tubing made of standard products.
Specifically, in PE demand, the proportion of packaging film and wire and cable consumption has continued to increase, the proportion of injection molded products has been declining year by year, and the proportion of hollow and pipes has remained stable at 12% for four consecutive years.

　　Among the demand for PP, the consumption proportion of injection moulding related to home appliances and automobiles steadily ranks first, and the proportion of consumption for drawing silk continues to decrease due to the decrease in the consumption of plastic woven bags.
And this year's hot spot-fiber, consumption accounted for a substantial increase of 5%.
In 2021, the pressure on the supply side will be huge, overseas orders will decrease, and domestic demand will become a decisive factor in the price trend of polyolefins.
We continue to be optimistic about the demand for packaging film and injection molding.

　　At the same time, the export volume of plastic products has increased significantly.
In 2020, the output of plastic products was 76.
03 million tons (a decrease of 7.
10% year-on-year).
Plastic bans, restrictions on plastics, and the epidemic are the main reasons for the decrease in the output of plastic products.

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