Overcoming Internal Frictions: Focusing on the Breakthroughs and Opportunities in the Polypropylene (PP) Export Path

In recent years, the polypropylene industry has faced the dual pressures of declining product prices and decreasing capacity utilization rates, leading to a continuous narrowing of corporate profit margins. The industry's profitability has come under strain, intensifying the demand for exports. Against the backdrop of widespread losses, some traders and companies have broken free from internal competition by adopting export strategies to open up new development opportunities. Through exports, they aim to curb disorderly low-price competition in the domestic market, accelerating the advancement of a globalized resource strategy.

1. Exploring the Export Path for Polypropylene: Rapid Capacity Expansion Lays the Foundation for Polypropylene Exports

2024 Annual Polypropylene Production Capacity Share by Country Chart

As seen from the 2024 polypropylene production capacity distribution chart by country, China's polypropylene production capacity accounts for 42.87% of the global total by 2024, followed by the United States at 8.18%. The global polypropylene production capacity in 2024 is approximately 119.39 million tons per year, an increase of about 24.78 million tons per year compared to 2020, with an average annual compound growth rate of 5.99%. The main driver of global polypropylene capacity growth is China, with China's share of global capacity rising to 43%, an increase of 7% compared to 2020. Therefore, the current global polypropylene capacity development focuses on Asia, and within Asia, it focuses on China, with China's influence in the global market increasing year by year.

China's polypropylene capacity change trend chart

Domestically, the production capacity increased from 25 million tons in 2019 to 48.76 million tons in 2025, with a compound annual growth rate of 11.76%, nearly doubling the capacity. This round of capacity expansion not only has a large base but also lasts for a long time, expected to end by the end of 2026. Under the rapid expansion of capacity, the path for polypropylene export has quickly opened up due to price advantages and the massive supply.

2. Exports continue to expand, from" opportunity "Turn" Normal supply ”

2020-2024 Annual Trend Chart of China’s Polypropylene Export Volume and Export Price (10,000 tons, right axis: USD/ton)

The export path of China's polypropylene industry is not accidental. In 2021, affected by the cold wave in North America, an overseas demand gap quickly emerged, leading to a significant increase in exports. Enterprises have become increasingly aware of the importance of export expansion. However, since China's exports are still in the early stages of development and there are not many long-term fixed overseas customers, whether export arbitrage opportunities arise determines the export volume. As a result, from 2022 to 2023, exports remained in a "low-profit, high-volume" stage, with export expansion relying more on price concessions.

The rapid expansion of China's export volume is mainly based on the initiation of export arbitrage, with general materials going overseas at "minimal profit and increased volume."

2020-2024 Monthly Market Price Trend Comparison of Yearly Polypropylene in Foreign Markets (USD/Ton)

China, as the world's largest producer of polypropylene, achieves economies of scale that reduce unit costs, making Chinese polypropylene price-competitive in the international market. The polypropylene spot market is troubled by a pattern of increasing supply and weak demand, leading to a continuous decline in price levels, positioning it as a "global low point," which creates a favorable price advantage for exports. The price trends and spreads between the Chinese and Southeast Asian markets have become influential factors globally.Polypropylene MarketThe important factors of flow direction determine whether the main export destinations, the Middle East and South Korea, will direct resources to China, and whether this can impact China's spot supply and demand as well as the deliverable volume of forward spot contracts.

2020-2024 During this period, the price trends in the Far East and Southeast Asia are generally consistent, with Southeast Asian prices often being higher and maintaining a certain price differential with the Far East. Therefore, based on the low prices in the Chinese market, the arbitrage space is limited, making the Southeast Asian market the main export direction for Asian polypropylene.

2025 In [year], with the continuous release of new polypropylene production capacity in China and increasing domestic supply pressure, the willingness of domestic enterprises to export has strengthened, intensifying competition in export prices. Overall, the export price of polypropylene filament dropped below $900/ton in January, and subsequently hovered around $895-900/ton. In April, the implementation of U.S. tariff policies, as Southeast Asia is a major production and export base for plastics, severely impacted downstream orders in the Southeast Asian market, suppressing the willingness to purchase raw materials in the region. To promote transactions, domestic enterprises intensified export price competition. In addition, the U.S.-China tariffs also had a significant impact on domestic PDH-based enterprises, creating substantial pressure on raw material costs. Some companies applied for import licenses to reduce cost pressure; although this could alleviate costs to a considerable extent, it imposed export volume requirements on these enterprises, resulting in low export prices reappearing in the market. In June, with the escalation of geopolitical tensions, it led to...Crude Oil PriceThere is a significant increase, and export prices have stopped falling and rebounded, but the extent is limited. Looking at the second half of 2025, the current Chinese polypropylene exports have entered a new normal of low-price competition, and in the future, adjustments will be needed through production. Product upgrades and localized overseas production could break the deadlock, making it difficult to sustain an export model solely reliant on price advantages.

4. Diversification of export destinations and gradual expansion of trade partners

2024-2025 Statistics of Polypropylene Exports to Major Regions from January to June

2025 From January to July, China's total PP exports amounted to 1.9206 million tons, a year-on-year decrease of 8.02%. The top five trading partners were Vietnam, Indonesia, Peru, Brazil, and Bangladesh, accounting for 41.45% of total exports. From January to June 2025, the export share of the top production and consumption regions was 65.77%, down 1.69% from 67.46% in 2024, indicating a more diversified export channel and a decrease in the concentration of export destinations. The Southeast Asian market, benefiting from convenient transportation, dense downstream factories, and relaxed trade policies with China, has long been a major export production and consumption area for Chinese polypropylene, with frequent cooperation with domestic raw material enterprises.

From January to June, Vietnam remained firmly in first place with an export volume of 259,900 tons, accounting for 16.62%. The reasons are as follows: Vietnam has taken on the transfer of Chinese manufacturing, and local consumption is mainly focused on standard raw material industries such as woven bags, non-woven fabrics, daily-use products, and packaging materials, which are suitable for the export of surplus general-purpose materials from China. In addition, the lack of tariffs, convenient geographical location, and strong transportation timeliness also attract Vietnamese enterprises to cooperate with Chinese raw material suppliers.

Indonesia's strong demand for raw materials is driven by its dense population and rapidly growing plastics industry, coupled with limited domestic supply, leading to a substantial volume of imports. In 2024, China's exports to Indonesia will see a significant increase. This is due to a stockpiling surge among local importers triggered by the import quota order issued by the Indonesian government at the beginning of the year. This scenario provides an excellent export opportunity for Chinese enterprises and traders, indirectly helping them successfully expand into the Indonesian market.

Aside from the Southeast Asian market, the proportion of countries in South America and Africa has increased significantly. The main reasons for this are the continuous efforts of domestic companies to expand export channels, resulting in a broader range of export markets. Additionally, regions such as South America and Africa have relatively low polypropylene (PP) production capacity, yet there is still a demand for plastics. Therefore, the export share to these regions has increased, and they may become major export destinations for China's polypropylene in the future.

5. Export Strategy Transformation: From "Exchanging Price for Volume" to "Winning by Quality"

2023-2025 Monthly Export Data Trend of Polypropylene (in 10,000 tons)

In recent years, the supply and demand structure of China's polypropylene market has undergone significant changes, with mismatched capacity expansion and demand growth leading to intensified supply-demand conflicts. Against this backdrop, focusing on the global market, "reducing imports and expanding exports" has become a key strategy for rebalancing the Chinese polypropylene market.

With the continuous efforts of Chinese enterprises, China's polypropylene industry has successfully transitioned from an "input-oriented" model to an "output-oriented" one. In March 2024, China's monthly polypropylene import volume was 310,700 tons, while the export volume reached 315,500 tons, marking the first time that China's monthly polypropylene export volume exceeded its import volume. From March to May 2025, China's polypropylene exports surpassed imports for three consecutive months, indicating the smooth expansion of export channels and the continuous growth of export scale. It is expected that a successful reversal of annual import and export volumes will be achieved in 2025. In the future, it is essential to maintain scale advantages while focusing on enhancing product added value and the resilience of international supply chains to cope with the increasingly complex international trade environment.

6. Riding the wave of exports, the coastal areas are seizing the opportunity.

2020-2024 Annual Statistics of China's Polypropylene Imports by Shipment and Delivery Locations (10,000 tons)

2025 From January to July, the cumulative import volume was 1.9206 million tons, a year-on-year decrease of 8.02%. The top five exporting registered locations are Zhejiang Province, Shanghai, Guangdong Province, Fujian Province, and Shandong Province, which together account for 80% of the total export volume.

From the perspective of production capacity and future planning, the newly added capacity is concentrated in coastal areas such as East China, North China, and South China. Both South China and North China have already experienced resource oversupply, while only East China still has some consumption gap. This has led to a significant increase in resource flow between regions in China starting in 2024. Zhongjing Resources has begun to encroach on the East China market, with Yulong and Jinen exporting large volumes of resources to East China. However, considering the limited consumption gap in East China, it is difficult to accommodate a large influx of resources. Therefore, the inter-regional resource flow within the domestic market is insufficient to adjust the supply-demand imbalance. As a result, coastal enterprises are shifting their focus from the Chinese market to the global market, and future industry competition will transition from price competition to regional competition and export competition.

High-end market demand is gradually expanding, and the specialized materials sector maintains incremental growth.

2023-2024 Statistics of Polypropylene Export Varieties in China

Due to the limited variety of domestic polypropylene products and the difficulty in achieving self-sufficiency in high-end materials, there is currently no surplus capacity to maintain exports. The main export products are homopolymer for drawing, injection molding, film, and thin-wall products. According to data from the General Administration of Customs, homopolymer accounts for as much as 87% of exports, impact copolymer accounts for less than 10%, and random copolymer ranges between 2% and 4%. The primary reason for this situation is that the main export destinations for domestic polypropylene are Southeast Asia and South Asia, where downstream consumption structures are dominated by plastic weaving and film, and raw material demand is mostly concentrated in these areas. Block copolymer is mainly used to produce automotive parts, household appliance housings, etc. Due to the varying stages of economic development within Southeast Asia, household appliance consumption also shows polarization. In the medical field, as a developing region, Southeast Asia’s overall medical infrastructure is gradually improving, benefiting from economic growth, population aging, and the improvement of medical insurance systems. The Southeast Asian medical market is undergoing rapid growth, providing sustainable growth opportunities for the export of our high-clarity materials.

8. Ocean Freight Constraints: PP External Demand Faces Intermittent Challenges

The suspension of tariffs between China and the United States has led to accelerated shipments by foreign trade enterprises, driving up shipping prices on the US route. Subsequently, due to the reallocation of shipping capacity and containers, the container shortage in the shipping market further pushed up prices on other routes. The rapid increase in shipping costs has squeezed export profits. For FOB export companies, the rise in freight rates significantly disrupts revenue flow. If these companies cannot pass the costs onto downstream customers, their profit margins will be directly reduced, intermittently affecting industry exports. Therefore, shipping costs are a practical factor that must be considered in the export process.

Future Export Trends and National Outlook

China's polypropylene industry is currently experiencing the largest and longest capacity expansion in its history, urgently needing to balance supply and demand. With abundant supply, prices continue to decline. Improvements in product quality and the development of high-end products will further drive export growth. Polypropylene exports are becoming increasingly diversified, covering regions such as Southeast Asia, Europe, Africa, and South America. In recent years, China’s exports to countries like Brazil, India, Mexico, and South Africa have performed well. In addition, a small amount is exported to Europe and the United States, but due to high shipping costs and long transit times, it is difficult to achieve large volumes in these markets.

In the field of product structure, as the external demand regions gradually expand, export products have evolved from homopolymer raffia and films to the areas of copolymers and transparent materials. Manufacturing companies are continuously adjusting production parameters to customize products that meet the demands of foreign customers, focusing on these high-growth tracks to accurately capture structural opportunities. Chinese polypropylene enterprises should continue to consolidate existing export markets and export products, actively explore new growth points, and ensure that export volumes maintain a stable and increasing trend.