Analysis of China PX imports in Q1 2021

According to customs statistics, China imported 3.417 million tons of PX in the first quarter of 2021, down 340kt or 9.1% on the year. The imports volume reduced to 941kt in Feb, hitting new low since Nov 2016. However, the imports increased compared to the last quarter of 2020, up 190kt or 6% from a quarter earlier.

From the standpoint of long-term trend, China PX imports are expected to decrease with lower dependency rate on imports as domestic PX capacity would expanding fast in Chinese mainland. In the short run, domestic PX supply increased with producers incentivized by better profits of aromatics, meanwhile, the appetite for PX imports also grew as PTA capacity expansion outpaced that of PX in the first quarter of 2021.

In terms of import origins, Brunei has come as the second largest origin with 359kt of PX supplying to China in the first quarter of 2021, which was nearly equivalent to the output in that country.

Imports from South Korea reached 1.324 million tons in the first quarter of 2021, new high since Q2 2020. According to CCFGroup’s investigation, the increase coincided with the gradual rise in plant operating rate in South Korea in 2021. The mean level of PX operating rate touched new high since Q2 2020 as well.

Japan came the third with 349kt of PX supplied to China in the first quarter of 2021, low level in recent years. Japan dialed back its PX exports due to low plant operating rate resulted by poor economics since 2020, coupled with unplanned plant hiccups in 2021.

PX imports from the Middle East reduced heavily in the first quarter, down 19% from a quarter earlier to 323kt. The imports decreased from last year, as demand was healthy with fast recovery of production from COVID-19 pandemic and there were big discounts on Middle East-origin PX spots in 2020, however, the spots were less attractive than term contract good and transaction in Middle East-origin goods was thin in 2021. In addition, some suppliers diverted supplies to Europe and the US where good was healthy, and some plants in Middle East underwent unplanned shutdowns.

Imports from Southeast Asia (excl. Brunei) rose 9.5% from a quarter earlier. PX operating rate was ramped up with the uptick in profits for refineries. Meanwhile, with the reduction in Middle East materials to China, supplies from Southeast Asia increased because of the geographical advantage in shipping cargoes to China.

In the second quarter of 2021, some plants have maintenance plans, but fewer than in previous years.

Based on the turnaround schedule, PX plant operating rate is estimated to drop by 2-3 percentage points in Southeast Asia and South Korea in the second quarter. The operating rate could advance notably by 6 percentage points in Middle East, while that in India, Taiwan and Japan is likely to keep broadly stable. From the standpoint of plant operating rate only, China PX imports could decrease slightly in the second quarter. Meanwhile, the rampant pandemic in India has led to operating rate cuts in downstream plants, hence whether India would increase PX exports is noteworthy.