China’s polyether polyols are unbalanced in structure and highly dependent on imports for raw materials. In order to meet domestic demand, China imports high-quality polyethers from foreign suppliers. Dow’s plant in Saudi Arabia and Shell in Singapore are still the main import sources of polyethers for China. China’s import of other polyether polyols in primary forms in 2022 totalled 465,000 tonnes, a year-on-year decrease of 23.9%. Import sources included a total of 46 countries or regions, led by Singapore, Saudi Arabia, Thailand, South Korea and Japan, according to China customs.

China Imports of Other Polyether Polyols in Primary Forms & YoY Changes, 2018-2022 (kT, %)

With liberalized anti-epidemic measures and continuously increasing consumer demand, Chinese polyether suppliers had gradually expanded their production capacity. China’s polyether polyols import-dependency ratio decreased significantly in 2022. Meanwhile, Chinese polyether polyol market saw significant structural excess capacity and fierce price competition. Many suppliers in China turned to target overseas markets to solve the prickly issue of overcapacity.

China’s polyether polyol exports kept rising from 2018 to 2022, at a CAGR of 24.7%. In 2022, China’s export of other polyether polyols in primary forms totalled 1.32 million tonnes, a year-on-year increase of 15%. Export destinations included a total of 157 countries or regions. Vietnam, the United States, Turkey and Brazil were the main export destinations. Rigid polyols were mostly exported.

China Exports of Other Polyether Polyols in Primary Forms & YoY Changes, 2018-2022 (kT, %)  

China’s economic growth is expected to reach 5.2% in 2023, according to IMF’s latest forecast in January. The boost of macro policies and the strong momentum of development reflect the resilience of China’s economy. With increased consumer confidence and revived consumption, the demand for high-quality polyethers has grown, thus China’s polyether imports will witness a slight increment. In 2023, thanks to capacity expansion plans of Wanhua Chemical, INOV, Jiahua Chemicals and other suppliers, China’s new polyether polyols capacity is projected to reach 1.72 million tonnes per annum, and the supply will further increase. However, due to limited domestic consumption, Chinese suppliers are considering going global. China’s fast economy recovery will drive the global economy. IMF predicts that global growth would reach 3.4% in 2023. The development of downstream industries will inevitably push up the demand for polyether polyols. Therefore, China’s polyether polyols export is expected to further increase in 2023.