The scale of China’s polyolefin market is gradually growing, and by the end of 2022, China’s polyethylene production scale is close to 30 million tons/year and polypropylene is close to 35 million tons/year. The high speed of polyolefin industry, on the one hand, increases the supply scale of China’s plastic market at the same time, due to the phenomenon of relatively homogeneous product structure of China’s polyolefin market, it also causes the phenomenon of large-scale cross-region logistics of China’s polyolefin products. Through a wide range of cross-region logistics mode, the sales pressure of Chinese polyolefins caused by the structural surplus of products is relieved, which is also a major logistics feature of Chinese polyolefins products at present.
Through the latest observations, it is found that the total volume of cross-regional transfer resources of polyethylene in China exceeds 10 million tons in 2022, accounting for 31% of polyethylene consumption, continuing the trend of growth. In other words, more than one-third of China’s polyethylene resources in 2022, appear to be transferred across regions, and the scale of cross-regional transfer, compared to 2021, shows an increase. Polyethylene, as an important representative of polyolefin products, has always received high attention from the industry, and the solid nature of polyethylene facilitates the long-distance transportation of the product. Polyethylene has a wide range of downstream applications, so basically every enterprise of polyethylene varieties, there will be national consumption, which also intensifies the strength of cross-regional transfer of polyethylene in China.
By looking at the inter-regional transfer of polyethylene in 2022 nationwide, the following characteristics are basically present:
For one, China’s polyethylene consumption regions largely overlap with supply regions, but the imbalance in the supply of grades has led to large-scale cross-regional transfers, which is a mismatch between supply and demand for China’s polyethylene brands;
Secondly, there are transfers in and out of polyethylene in every region of China, meaning that polyethylene is in and out of every region, which is the transfer behavior of China’s polyethylene logistics pattern and is directly related to the rapid transformation of the end-consumer market and the timely market response of polyethylene products.
According to the cross-regional transfer of polyethylene products in China, East China remains the largest polyethylene consumer market in China, consuming nearly 15 million tons of polyethylene in 2022, accounting for 39% of the total volume in China. 2022 new polyethylene installations are all concentrated in East China, but there is still a polyethylene transfer of nearly 4 million tons, which shows that East China currently There is still a large polyethylene supply gap and the possibility of a large amount of polyethylene transfers in the long term.
North China is the largest polyethylene transfer region in China, with close to 5 million tons of polyethylene transfers existing in 2022, with the largest transfer from Northwest to North China, followed by Northeast. North China is not a large area for its own polyethylene production, but there are a large number of downstream enterprises of film, injection molding products and pipes, especially a large number of film production enterprises, which need a large amount of linear polyethylene resources to supplement the transfer, thus creating a huge transfer of polyethylene resources into the situation.
Northwest China is the largest polyethylene transfer out region in China, with more than 6 million tons of polyethylene in 2022, transferred out through Northwest China to North, Southwest, East and South China, with the farthest transfer from Xinjiang to Guangdong. Northwest polyethylene is characterized by the presence of both coal and oil-based systems, and the fact that Northwest China is the second smallest consumer region in China, after Central China, combined with its large supply volume, results in a large amount of polyethylene being transferred out of Northwest China each year. The scale of polyethylene transfers out of the Northwest is the key driver of the year-over-year growth in cross-regional transfers of China’s polyethylene resources.
Finally, the phenomenon of large-scale cross-regional allocation of polyethylene resources in China largely reflects the imbalance between supply and demand of polyethylene resources in the seven major regions of China and the variability of grade supply between different regions. The massive cross-regional allocation of polyethylene resources, apart from the northwest market, comes more from the inaccurate control of local market consumption structure by producers. If we do a better job of allocating polyethylene resources in a more detailed way, the phenomenon of long-distance transfer of polyethylene across regions may be alleviated.
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