ASIA – Southeast Asian exports of polyolefins to China, in particular polyethylene and polypropylene, have increased threefold in the last decade, and trade agreements present within Asia are expected to promote further growth in the plastics industry.
The Association of Southeast Asian Nations (ASEAN) has the ASEAN Free Trade Agreement (AFTA) which allows trade between the 14 member countries at zero import duty. The China-ASEAN Free Trade Agreement (CAFTA) also offers zero import duty on most goods including plastics and since it was implemented in January 2010, has helped boost trade in the region significantly.
According to analysis by research and consulting firm GlobalData, a large portion of polyolefins produced in Southeast Asia is exported to the Chinese market, which is the largest importer and consumer of polyolefins in the world. China’s demand for polyolefins is expected to grow from 31.5 million metric tonne per annum (mmtpa) in 2011 to 41.1 mmtpa by 2016 at a CAGR of 5.5%.
Thailand is currently the largest exporter of polyolefins to China, and also has the largest consumption and production of polyethylene and polypropylene in the Southeast Asian polyolefin industry.
Singapore is another major player which has become a major polyolefins exporter to other Asian countries, attracting exporting companies due to the island-state’s ideal location and robust infrastructure for petrochemical exports. The country also acts as a global trans-shipment hub for Middle Eastern imports into Asia, making use of AFTA’s zero import duties.
Within Southeast Asia, polyethylene demand is expected to increase from 4.9 mmtpa in 2011 to 6.2 mmtpa by 2016, while production is expected to increase from 6.3 mmtpa to 9.3 mmtpa during the same period.
Meanwhile, demand for polypropylene in the region is expected to increase from 3.6 mmtpa in 2011 to 4.7 mmtpa in 2016, and production is expected to improve substantially from 3.72 mmtpa to 6.18 mmtpa during the same period as a result of several new plants coming on-stream.
As both China and Southeast Asia continue to develop their economies, the ever-increasing demand for polyolefins and the ease and affordability of trade facilitated by AFTA and CAFTA is expected to see polyolefin imports to China continue to boom, and this will in turn boost the plastic packaging industry in Asia, which is already seeing high growth rates.
Asia Pacific is estimated to have accounted for about 29.4% of global PET packaging consumption in 2012, followed by North America at 24.1% and Western Europe at 19.7%. The PET packaging market in Asia is expected to grow by 9-14% at least until 2017.