China is a key market for many US polymer product exports. As Asian demand continues to exceed domestic supply, the Chinese market will become more and more important in the next 10 years. S&P Global Platts Analytics data show that In 2028, Asia's polyethylene market gap will exceed 26 million tons, which can be filled through imports. The Middle East and North America are the world's cheapest petrochemical feedstocks, and are also the gathering place of the world's major polyethylene suppliers. The Middle East controls 80% of them enter the Asian export market, and North America will compete and increase market share.
U.S. President Donald Trump announced plans to impose high tariffs on steel and aluminum and impose a tariff of nearly US$50 billion on China’s imported products, triggering a sell-off of US stocks last week. People fear that China may take retaliatory action. The United States imports of petrochemical products include plastic raw materials polyethylene, polyvinyl chloride, vinyl chloride, ethylene glycol and ethylene.
On Monday, Mark Lashier, CEO of Chevron Phillips Chemicals, said at the symposium in San Antonio: 'China is the fastest growing market for petrochemicals, and if we block this, we will become vulnerable.'
China is the third largest recipient of polyethylene in the United States in 2017, behind Mexico and Canada, and these countries have not been exempted from tariffs on steel and aluminum.
CEOs who spoke with Lashier expressed the same concern and pointed out that in the case of uncertain trade, the construction of future petrochemical projects may be more expensive.
Luther Kissam, CEO of Albemarle, said: 'We are worried about China's response. The trade war between China and the United States will lead to many uncertainties and will also bring a lot of risks, and these risks will not be included in the next project. '
Petrochemical producers and traders have different views on whether China and the United States will break out of the trade war.
A source said: 'If China decides to retaliate with 'levying duties on imported products', it will be a grim situation.'
Another trader source said that if China counters the 'tariff on imports of petrochemical products', the market will be interrupted for several months, and some balance will be found later. He pointed out that for traders, , Volatility provides an opportunity for profit growth.
The source said: 'For traders, all these disturbances are beneficial to us.'