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According to Chinese players, Thailand’s PTT is planning to suspend all contract PE businesses in China starting 2017. In its official email, the company said it would concentrate on domestic Thailand and Southeast Asia market in the coming year, which resulted in lower allocation to other export destination, including China.

A trader confirmed the situation said, “Most of our businesses with the supplier are based on contract basis, and our 2017 contract has not been renewed. Yet, our supplier would still offer on spot basis.”

Many players doubt such decision could be materialised given the sheer size of China market. In fact, in 2015, China imported total 9,862,400 tons of PE, in which 901,100 tons are from Thailand. In just the first six months of 2016, Thailand exported 319,300 tons of PE to China, according to the General Administration of Customs of the People 's Republic of China. However, in case of a firm decision, depending on the extent of an allocation cut, the impact on China’s PE sector might be significant since the country still depends heavily on import to meet growing local demand.

It is also worth noting that PTT’s new PE plant with capacity of 400,000 tons/year is scheduled to come online by end of 2017, which produce mostly metallocene grade. Source from the producer is not immediately available for comment. More update shall become available soon.