Introduction: In August 2024, the PE import volume saw a notable MoM decline, with multiple factors influencing the market dynamics. Let’s delve into the reasons behind this situation and take a look at what will happen in the future.

August Saw a 6.06% MoM Decline in PE Imports

In August 2024, the import volume of PE was 1,220.31kt, which decreased by 6.06% from last month but increased by 0.35% from last year. From January to August 2024, the total import volume reached 9,056.28kt, up 5.59% YoY. The import volume decreased in August after a substantial increase but remained at a relatively high level for the year.

Typically, July and August are off-peak seasons for demand in the downstream industries of PE. Under these circumstances, China’s PE market price showed a decreasing trend and has been in a global low, which has greatly decreased the market’s appeal to foreign suppliers. In line with this pattern, imported resources ought to naturally gravitate more toward foreign markets, signifying a downward tendency in China’s imports of PE. However, demand from abroad has decreased as a result of the general economic slowdown and the weakening macroeconomic situation. Due to the generally weak demand in the Middle East and Europe, a significant amount of imported resources had to return to China, where there was still rigid demand despite reduced pricing.

Import Volume from Most Major Origins Fell in August

Among the 10 major origins of China’s PE imports, most saw a decrease in their volume to China in August.

Specifically, the import volume from the U.A.E., the U.S., Saudi Arabia, South Korea, Singapore, Thailand and Malaysia decreased significantly. Among them, Saudi Arabia, Singapore and Thailand ranked top three regarding the reduction. Conversely, the import volume from Iran, Canada and Qatar increased, while that from other origins showed limited changes.

In August, the import volume from the U.A.E. was 229.8kt, which was the highest among origins but decreased by 1.6kt or 0.7% from July. The U.S. came in second with import volume of 210.9kt, down 0.9kt or 0.44% MoM. The import volume from Saudi Arabia ranked third at 202.9kt, decreasing by 35.7kt or 14.95% from July. Iran’s import volume continued to increase, ranking fourth at 136.1kt, up 12.5kt or 10.16% from July. The import volume from South Korea was 109.9kt, down 10.9kt or 9.92% MoM, and that from Singapore was 74.4kt, which was 16.9kt or 18.59% lower than that in July. The import volume from Canada registered the largest growth of 27.79% and reached 31.4kt.

General Trade, Processing Trade with Imported Materials and Logistics Goods in Areas Under Special Customs Supervision Dominated

In terms of the trade mode of PE imports in August, general trade, processing trade with imported materials, and logistics goods in areas under special customs supervision were the most common. The import volume via general trade accounted for 81.74% of the total at 997.49kt, down 7.53% MoM; that via processing trade with imported materials was 110.32kt, which decreased by 12.13% MoM and accounted for 9.04% of the total; and logistics goods in areas under special customs supervision was 86.37kt, representing 7.08%.

Forecast: PE Imports to Rebound in September

SCI predicts that the import volume may inch up in September. It is important to note that although there was a decrease in August, the import volume of PE remained relatively high compared with the monthly level in the past two years. Weak overseas macroeconomic data and overall demand decline in August made it difficult for foreign suppliers to sell their goods elsewhere but to China, where prices were low but rigid demand persisted. From July to August, China’s domestic market was in the off-season for downstream industry demand. Additionally, factors such as earlier unit maintenance, exchange rate fluctuations and sustained high sea freight rates put considerable pressure on traders, leading to a noticeable decrease in PE prices in August. As China’s domestic demand gradually increases, the attractiveness to overseas resources is expected to rise in September, potentially leading to an increase in import volume.

Among the origins for imports, although the import volume from mainstream origins may see a decreasing trend, that from some Middle Eastern and North American regions may witness increases. Regarding trade mode, general trade, processing trade with imported materials and logistics goods in areas under special customs supervision may show varying degrees of increase.

Taking everything into consideration, the PE import volume may rise somewhat in September 2024, which is primarily due to the decline in the USD exchange rate. Furthermore, as China’s domestic demand picks up in September, the import supply will probably see an uptick.