Saudi Arabia shifts focus to PE exports to Western Europe

China's main PE suppliers are located in the Middle East and are Saudi Arabia, Iran, UAE and Qatar. All are subject to a drop in exports to China in 2021. Saudi Arabia, which is capable of exporting more than 9 million tonnes of PE per year, has faced a 22% drop in exports to China. in the 1st - 3rd quarter of this year.

Although China still accounts for 20% of Saudi Arabia's total exports and 14% of Singapore's, it seems to have stepped up sales efforts to alternative markets due to reduced Chinese import demand. .

According to statistics, even surpassing Turkey, a frequent market of Saudi PE, Belgium is also in fourth place in the list of exports of Saudi Arabia, showing an increase in goods. 50% year-on-year in Q1 – Q3. Total exports to Belgium for the whole of 2021 are expected to be larger as they have to accelerate sales in Q4 to free up inventories, which could put Belgium in the top position. third place on the list.

Belgium is a hub for Western Europe because imports are distributed from the main ports in Antwerp.

America is back in the game

The US is indeed the main PE supplier to the world thanks to the newly added capacity and the ability to export more than 10 million tons. However, the country's performance in 2021 has been lower than expected as continued outages crippled the supply chain. Exports from January to October 2021 were down 17% year-on-year, as the US only increased exports to nearby destinations including Canada, Mexico and Brazil.

Statistics show that US PE exports to Belgium fell slightly by 3%, following the overall decline, although Belgium remains the third largest market with more than 655,000 tons after Mexico and Canada. PE exports increased 11% to Spain and 9% to the UK while exports to Italy fell 21%.

US PE film quotes have started to appear more frequently recently in Europe, the region that offers the most attractive returns to date. This suggests that the US may have offset the drop in exports to Europe in the fourth quarter by increasing sales. In fact, European market participants anticipate pressure to intensify particularly in Q1 2022, unless US manufacturing activity is impacted by another weather event.

Korea will also join the game

Korea, as the fourth or fifth largest PE supplier to China, also faces a 15 percent drop in annual exports and shifts its focus first to Vietnam. Together with the new capacity, Korea will be able to export about 3 million tons of PE by the end of this year.

Korea's third largest PE export market, after China and Vietnam, is Belgium with an annual increase of 66%, followed by Russia with an annual increase of 41%. Exports to Italy came in 6th place, showing a remarkable increase of 165% over the same period last year. That means Korea has significantly increased its exports to Europe. Certainly, the increase in total exports to Europe is expected to be much higher in 2022.

Competition heats up in Europe

The statistics give us clear evidence that Europe will be the main target market for PE suppliers from the Middle East, US and South Korea in 2022. Although China remains the top buyer of PE suppliers. them, but they will struggle in sales to make up for the drop in the Chinese market.