Reduced Supplies from Saudi Arabia Adds Pressure on China in the Trade War with US

Saudi Arabia is China’s top supplier of HDPE, LLDPE, MEG, DEG and styrene and also ships large volumes of polypropylene, liquefied butane gas and liquefied propane gas, among others. The recent attack on Saudi oil facilities will reduce exports of polymers and chemicals, at the same time as imports from the US are curtailed by punitive duties.

Through July, 2019, China’s imports from Saudi Arabia were: 1.2 million tons of HDPE, 26% of its total imports; 788,000 tons of LLDPE, also 26% of total; 2.6 million tons of MEG, 45% of total; 212,000 tons of DEG, 46% of total; and 556,000 tons of styrene, 34% of total.

Other major Imports from Saudi Arabia included: polypropylene, 253,000 tons; liquefied butane gas, 348,000 tons; and liquefied propane gas, 875,000 tons.

The duration and extent of the supply disruption are not yet know. However, China has the option of increasing supplies from the US by lowering duties currently at 25% or higher, which have sharply reduced supplies.

Written by Jean J. Sudol. Data from International Trader Publications’ World Trade Reports on HDPE, LLDPE, MEG, DEG, Polypropylene, Liquefied Butane Gas and Liquefied Propane Gas.