China ramps up chemical exports as domestic demand declines

Housing and autos are the 2 largest markets for chemicals. Both are in major downturns in China: • The property market has been in a major decline since 2021 as MERICS note: • “The value of new housing has fallen 60% since 2021“ • Auto sales are also tumbling and set to fall 22% this year, according to the auto association

Consumer sales are up just 1.1% this year. As the South China Morning Post reports: “Consumers across China are holding back on spending during the annual shopping extravaganza as a stock market slump and a prolonged decline in property values erode household wealth, with many families making debt reduction and deleveraging greater priorities.”

In any normal market, chemical companies would be cutting back on new capacity. But not in China as the Financial Times chart confirms: “Between 2020 and 2025, production of important ingredients for plastics soared — styrene by 97%, ethylene by 80%, polyethylene by 75%, polypropylene by 71% and PVC by 15%”.

The problem is that Beijing is focused on maintaining employment. Profit isn’t a key issue. So companies are refocusing on exports to drive sales growth.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →