Will Chinese tariffs affect the US Polypropylene (PP) resin production rates?

Short Answer: Not directly and not by much

Long Story: Unlike polyethylene that trades globally, American made PP tends to trade regionally with 2/3 of US exports going to either Mexico (~ 1 Mta) or Canada (~ 0.5 Mta). China, by contrast, imports only ~ 0.07 Mta of American made PP (Chart below). Therefore, a tariff war between the US and China does not have a material impact on US PP production rates. 

What about indirect impacts? 

If trade wars result in a global recession, we expect energy/feedstock prices and demand for PP manufactured goods to be significantly impacted. This change in supply cost and demand pull will eventually impact US PP production rates. Will cross that bridge when we get to it!

Call BIC Advisory Group for a detailed analysis of tariff related trade disruptions.