China ramps up chemical exports as domestic demand declines
Housing and autos are the 2 largest markets for chemicals. Both are in major downturns in China: • The property market has been in a major decline since 2021 as MERICS note: • “The value of new housing has fallen 60% since 2021“ • Auto sales are also tumbling and set to fall 22% this ...
China is increasing its chemical exports as domestic demand for housing and autos dwindles, according to recent reports. The property market has declined by 60% since 2021 and auto sales are projected to drop by 22% this year, with consumer spending up only 1.1% this year. Despite these challenges, chemical companies in China are not cutting back on new capacity.
Instead, production of key chemicals for plastics has surged between 2020 and 2025, with styrene increasing by 97%, ethylene by 80%, polyethylene by 75%, polypropylene by 71%, and PVC by 15%. Beijing's focus on maintaining employment over profit has led companies to refocus on exports to drive growth. Polypropylene, a major polymer, is now a significant export.
As domestic demand for autos and housing remains low, China is exporting surplus production. This has resulted in China becoming a major global exporter, with output reaching 107% of domestic demand in 2025. The increased exports are impacting global markets, with negative margins in NE Asia, SE Asia, and India, while US Gulf and NW Europe have only positive margins.
China's self-sufficiency in polyethylene (PE) has risen to 83%, and it is likely to export by 2029. This output expansion, combined with falling demand, indicates that China will likely be a major exporter by 2029. The European Union should consider implementing quotas to restrict Chinese imports to prevent them from overwhelming the European industry and the jobs it creates.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
