China PX imports decrease in September

According to China customs data, the country imported about 674kt of PX in Sep 2023, down 125kt or 15.6% month on month. After the rebound in import volume in Aug, the volume reduced again in Sep, and then how did it come?

It can be seen from the comparison of PX imports in Jul, Aug and Sep that The volume from South Korea, Brunei and Vietnam reduced obviously in Sep.

As for South Korea and Vietnam, the reason for the decline in PX imports from those two countries in obvious. There's only NSRP in Vietnam that produces PX, and it has been shut since Aug 25 and suspended PX exports. In South Korea, PX plant operating rate has been falling as some feedstock has been allocated into gasoline blending pool since the first half year. In Aug, some PX lines of Hyundai, Lotte and GS were shut for maintenance, and as of Sep, the average plant operating rate dropped to this year's low of around 50%, which led to the reduction of PX exports from South Korea to China.

Hengyi Brunei's PX plant kept running stable, yet the exports to China still decreased sharply. Firstly, Hengyi Brunei supplies part of PX to several PTA plants in South China, but as some PTA plants either cut operating rates or shut in Aug and Sep, demand for feedstock PX reduced. In addition, Fuhaichuang and Sinopec HRCC have restarted their PX plants, which competed with Hengyi Brunei for market shares in South China. Secondly, demand for PX from South America improved, and some materials from Brunei were diverted to South America market.

Looking forward, Vietnam's PX exports to Chinese mainland are expected to recover with plant restarted. South Korea PX plant operating rate is anticipated to increase with exports rising, as Hyundai and Lotte have restarted their PX lines and GS may restart its 550kt/yr line in Nov. As for Brunei, the exports to South America may not keep stable, while the increase in exports to China may be limited, due to reduced demand from PTA plants and increasing PX supply in South China.

In addition, gasoline blending profits have weakened, and toluene and MX prices are dropping, which would lead to recovery of TDP profits. It is heard that some PX plant in China may raise operating rate, and plants outside China may also hike operating rate and increase the exports to China.