The Great PP Rebalancing: How China’s Self‑Sufficiency Is Redrawing the Global Market

CHINA’S RISING polypropylene (PP) self-sufficiency, evidence for which is provided by the above chart, is a combination of both aggressive capacity additions and local demand growth that, following the late‑2021 Evergrande Turning Point, has surprised most people by its weakness.

As recently as 2020, at the height of the pandemic‑driven “China in, China out” story — polymers and chemicals flowing in greater volume to China to be exported as finished goods to meet stimulus‑driven demand — net imports were at 6.1m tonnes. This set China apart as by far the biggest export destination for global producers.

But last year, with the final data for December just published, net imports fell to around 300,000 tonnes. And again, as with the weakness in demand growth, this was a surprise. The consensus view had been that last year’s net imports would be some 1.7m tonnes.

GLOBAL PRODUCERS LOOK ELSEWHERE

What this means for the global PP business, as I shall explore in further posts, is that other markets have become more important. Africa, Turkey, India, Southeast Asia and Latin America were the subject of a lot of interest from producers at last month’s GPCA conference in Bahrain.

It felt as if interest in every tiny detail of pricing trends from our editors had stepped up from just a year earlier, at the 2024 GPCA in Oman, because of last year’s unexpected scale of decline in China’s net imports.

But as the table below shows, competition from China in these other markets is increasing as it steps up its exports — the main reason why, on a net import basis, China imported just 300,000 tonnes of PP last year.

EXPORT PATTERNS SHIFT, BUT THE STRUCTURE HOLDS

In terms of the distribution of China’s exports, 2025 didn’t show a great deal of change versus the pre‑Evergrande 2021.

Southeast Asia, thanks to the ASEAN–China FTA, remained the most important export destination for China last year. Vietnam also stayed in poll position, with Indonesia and the Philippines also making the top ten in both 2025 and 2021.

But just look at the shift in the scale of shipments: From 236,188 tonnes to Vietnam in 2021 to 538,878 tonnes last year. Exports to Indonesia jumped from 58,950 tonnes to 204,447 tonnes.

This, of course, reflects China’s growth in production and the broader trend of more and more Chinese components, in general, going to countries such as Vietnam and Indonesia.

They are then assembled into finished goods as part of the re‑routing of global trade caused by the trade war, and then shipped to the West and to other developing markets. It remains to be seen whether this type of trade will be affected by tougher US trans‑shipment or rules‑of‑origin regulations in 2026.

REGULATORY UNCERTAINTY AND RISING COMPETITION

Any such tightening of regulations might provide other PP exporters — from South Korea, the Middle East etc. — with more of a competitive edge in the non‑China markets as end‑users change their Bill of Materials.

But given the chaos of US trade policy, illustrated most recently by the threats and subsequent withdrawal of threats of tariffs relating to the US desire to own Greenland, this is not a banker. Another scenario is that overseas competition from China will increase rather than decrease this year as more capacity comes onstream.

IMPORT PARTNERS TAKE A HIT

The final chart for today illustrates sales turnover losses by China’s top ten import partners in 2025 versus the same top ten applied to 2021 (the actual 2021 was different).

These losses were calculated by multiplying China Customs’ data in tonnes for the imports from the top ten by the average CFR China price for homo‑injection, raffia, block and random copolymer grade. The numbers for 2025 were then subtracted from 2021 to show the differences.

South Korea lost $795m in 2025 versus 2021. Taiwan was down by $480m and Saudi Arabia by $430m, and so on, as the chart illustrates.

This was a reflection of falling import volumes and lower PP pricing resulting from the decline in crude values and the global PP oversupply.

Imports reported by China from South Korea fell to 550,000 tonnes from 1.3m tonnes as prices declined to $866/tonne CFR China from $1,187/tonne CFR China. Imports from Taiwan slipped to 274,313 tonnes from 604,940 tonnes.

A RACE TO THE BOTTOM

It is what it is. The race to the bottom in global PP markets will surely continue this year. China could export even more, to the point where it swings into a net export position in homopolymer grades. And the non‑China markets listed earlier will see fierce competition.

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