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Sino-U.S. Trade Friction The LDPE Market In The Two Countries Feels Different

Apr 26, 2018

Recently, the Sino-U.S. trade frictions are boiling. Through this month's rise of smoke, everyone is also feeling the impact on the polyethylene market. Then what are the feelings of the two countries in the impact of polyethylene?

Speaking of this, we still need to start with China’s “ban on abolition”. The ban on China’s refusal to be a global junkyard has had a more severe impact on the world. The world’s most unpretentious ones are Europe and the United States. As early as the beginning of the year, the United States There are websites that have voiced the fact that the United States is the world’s largest waste-producing country, and Oregon is known as the “leader of the United States for environmental protection”. At present, a recycling yard in the state has already accumulated 600 tons of garbage to be recycled. Since October 2017, the local area has been forced to land 800 tons of waste. In the past, most of the garbage from residents of southern Oregon will be shipped to China. This practice, which has been going on for many years now, has been completely subverted. Under this pressure, the waste reprocessing industry in Europe and the United States has been forced to transform and upgrade the waste reprocessing industry. Subsequently, the EU Parliament, the EU Council, and the European Commission revised the “waste legislation”. In addition to the transformation and upgrading of the scrap reprocessing industry, it is also required to reduce some plastics. The use of products, for example, requires that food waste be halved by 2030, and the revised legislative proposal sets clear targets for waste reduction.

With the continuous increase in the supply of polyolefins in the world, reducing the use of plastic products will inevitably put pressure on the consumption of new materials. From the perspective of the trade flow of polyolefin raw materials in the United States, US polyolefins are net exporters, and their supply sources It mainly exports to Canada, Western Europe and China. In 2017, about 12% of US exports were exported to the Chinese market. China is the third largest importer after Mexico and Canada.

From the United States’ supply of polyethylene, with the prosperous development of the United States shale gas revolution has promoted the revival of the American chemical industry, the growth of the United States’s polyethylene production capacity has accelerated, but the reduction in the amount of policies and the trade restrictions of exporting countries have made the United States’ The polyethylene market is facing the paradox of consumption. According to incomplete statistical data of Jinlianchuang, the polyethylene production capacity will grow rapidly from 2017 to 2018. The high pressure difference involves high pressure production capacity of about 800,000 tons/year. It is also reported that Formosa Plastics USA A 625,000 tonne LDPE unit is being built at PointComfort in Texas.


For China, China imported about 155,000 tons of high pressure from the United States in 2017, ranking sixth among LDPE importers, accounting for 6.5% of LDPE imports and accounting for 3.1% of domestic LDPE consumption. With the continuous increase of production capacity, the self-sufficiency rate of domestic PE has increased, and China can balance this gap through its own production increase and imports from other countries.

In this triumphant and defeated trade friction battle, its influence is also reflected in the first time through the market trend:


From the above, we can see that behind the trade frictions, China's LDPE prices have risen, while the US LDPE prices have clearly declined, and in the description of the US LDPE market, the demand in the Americas market has slowed down, supply has increased, and inventory has risen. This is mainly due to Sino-US trade. As a result of the war, Asian demand has fallen, export activities have been difficult, and raw material prices have fallen. While the LDPE price in the Chinese market has risen, the atmosphere of market trading has been more active than in the previous period. Although the price trend has the speculation factor of reduced supply in the United States, the reduction in domestic LDPE supply due to maintenance factors is also an important factor in the rise of domestic LDPE.

On the whole, Sino-US trade friction, China and the United States have different perceptions. In the trend of the international LDPE market, this friction has a far greater impact on the United States than China.