Through the Five Major Changes in China's Polypropylene Market, Observing the Industry Trend Evolution by 2025

Introduction:In 2025, China's polypropylene will still be on the fast track of capacity expansion, and the market supply and demand pattern will change rapidly, which may trigger a series of changes in the Chinese and even global markets. It is expected to revolve around five major changes: globalization, supply and demand rebalancing, high-end development, import and export reversal, and end-user consumption.

One,China's polypropylene globalization process is accelerating, transitioning from being large but not strong to being both large and strong.

2020-2025 Global Polypropylene Annual Production Capacity Change Trend Chart (10,000 tons/year)                                              

2024 Global polypropylene capacity was approximately 119.39 million tons per year in 2024, an increase of about 24.78 million tons per year compared to 2020, with a compound annual growth rate of 5.99%. The main driver of global polypropylene capacity growth is China, with China's capacity increasing to 43% of global capacity in 2024, up 7% from 2020. China's polypropylene globalization process is accelerating, but it still shows a characteristic of being large yet not strong, lacking globally competitive products.

II. China's polypropylene has entered a stage of structural overcapacity and may undergo a round of supply and demand rebalancing.

2020-2024 Annual Polypropylene Industry Chain Supply and Demand Balance Sheet (Unit: 10,000 Tons)

Three, The high-end R&D of China's polypropylene products has entered the "deep-water zone." , and began to move towards becoming a global brand.

With the accelerated transformation and upgrading of the domestic polypropylene consumption structure, the collision between traditional energy and new energy has sparked innovation, propelling the high-end, differentiated, and specialized development of polypropylene into the "deep water zone." The industry is witnessing a surge in the research and production of high-performance, high-efficiency products. This conference will focus on these hot areas: bio-based polypropylene, modified polypropylene, foamed polypropylene, and metallocene polypropylene, setting the benchmark for the industry's high-end development.

IV. China's Polypropylene Industry Ushers in a New Era of Export in 2024, with 2025 Marking the Pivotal Year of Transition from Net Importer to Net Exporter

In the just-passed year of 2024, China's polypropylene exports achieved impressive results, with export volume increasing from 1.31 million tons to 2.4 million tons, a year-on-year growth of 83.4%. In March, a notable turnaround from net imports to net exports was achieved. As Chinese companies more actively expand into overseas markets, diversifying their channels beyond Southeast Asia to regions such as South America, Africa, and Central Asia, 2025 may become the most critical year for China's polypropylene industry to transition from a net importer to a net exporter.

5. Polypropylene has a wide range of downstream applications and strong rigid demand, and traditional and emerging fields will collide with new sparks.

Although traditional plastic woven and non-woven sectors face slowing growth or even decline, there is no single area of polypropylene (PP) consumption that will be completely replaced due to its numerous applications. Moreover, China's new energy vehicle industry is developing rapidly, with PP accounting for 60% of the plastic consumption in this sector, driving an annual growth rate of over 10% in the co-polymer class of PP. Looking ahead, as China's competitive advantage in polypropylene product consumption continues to increase and national policies boost consumption layer by layer, after the peak period of capacity expansion, the supply-demand gap will return to normal.

2025 Monthly Supply and Demand Balance and Price Linkage Forecast of Polypropylene in China for 2023 (10,000 tons, right axis: yuan/ton)

2025 In recent years, against the backdrop of high cost support, the supply-demand gap has become the main factor influencing market price fluctuations. As the supply-demand contradiction of polypropylene continues to deepen, especially with the off-season demand at the end of the fourth quarter overlapping with the concentrated release of new production capacity, the market supply-demand contradiction has intensified, putting pressure on price trends. After the decline in the second quarter, the likelihood of a price increase in the third quarter driven by demand has increased, with the price fluctuation range narrowing across different regions and categories.