Saudi Arabia has been China's main PE supplier for many years now. However, in recent years, PE imports from Saudi Arabia to China have decreased slightly, but have gradually lost market share for reasons related to China's increased domestic PE capacity and strengthen global competition, especially with the US.

The loss of HDPE market share of Saudi Arabia is very large

After peaking in 2019 with over 2 million tonnes of HDPE exported to China, Saudi Arabia has lost market share since then, although the country remains China's top supplier. With around 1.9 million tonnes of HDPE sold in 2020 and 1.3 million tonnes of HDPE in 2021, Saudi Arabia has further lost market share in 2022 to less than 1.3 million.

When considering this year's cumulative HDPE imports from Saudi Arabia for the January-April period, a much larger drop of 25% can be seen from last year. This marks the lowest cumulative volume since 2016.

LDPE imports from Saudi Arabia fell sharply

In 2020, Saudi Arabia holds the second place in terms of LDPE imports in China, with a record high volume of more than 470,000 tonnes. However, in 2021, the import volume fell below 350,000 tons, down about 26% compared to the previous year. By 2022, Saudi Arabia's LDPE imports are up slightly by about 8% year-over-year.

However, in the first four months of 2023, Saudi Arabia's LDPE imports fell significantly by 19 percent year-on-year, failing to maintain a recovered market share. According to ChemOrbis Import Statistics, January-April cumulative imports from Saudi Arabia show the lowest volumes since 2017.

The decline in annual statistics for both LDPE and HDPE reinforces the forecast that Saudi Arabia will continue to lose market share in China by the end of 2023.

Saudi Arabia's LLDPE sales to China are relatively better, but still affected

Similar to HDPE and LDPE, LLDPE imports from Saudi Arabia hit an all-time high of over 1.3 million tons in 2019 and they have started to decline since then. In 2021, there was a significant drop of 25% year-on-year to less than 1 million tons. Last year, there was an 11% recovery with Saudi Arabia regaining some lost market share.

The statistics from January to April this year also show a year-on-year increase of 11% for LLDPE imports from Saudi Arabia into China. Despite the year-on-year increase, it is still far below the pre-2021 performance.

Increased PE capacity in China affects imports from Saudi Arabia

The main causes for Saudi Arabia's steady loss of market share include China's rising PE capacity. According to ChemOrbis Pro Manufacturing News, China has added around 1 million tons of PE in 2022 while more than 3.5 million tons of new PE capacity is planned for this year. Furthermore, a larger addition is planned for next year with more than 8 million tons.

By 2027, China's total PE capacity is expected to reach more than 50 million tons. As China's domestic production capacity increases, its dependence on imports decreases, leading to a decline in Saudi Arabia's share of PE imports.

Competition from other countries reduces PE imports from Saudi Arabia

Another factor contributing to Saudi Arabia's decline in market share is increased competition in the global PE market. The growing global PE supply, with new entrants to the market, is increasingly competitive, making it difficult for Saudi Arabia to maintain market share in China.

US market share increases steadily but slowly

The US is also steadily increasing its share of global PE trade, including exports to China. As ChemOrbis Statistical Tool shows, the increase in US PE production led to a slight shift in market share from Saudi Arabia to the US. While the pace of change may be slow, this has contributed to Saudi Arabia's gradual loss of market share, especially since 2020.

Source: chemorbis