GACC's March 2024 Data Shows China's Exports Surged 7.4%, But Chemical Import Volumes to the US Are Still Falling: Here's Why Factory Capacity Is Shifting

The General Administration of Customs of China released its March 2024 trade numbers on 12 April, and the headline was a 7.4 per cent year-on-year jump in total exports. That’s the strongest month-on-month reading since late 2022, and the commentary out of Beijing has been about a rebound in global demand for Chinese goods. But if you’re a US chemical importer, the number you care about isn’t the headline. It’s the US-bound subtotal, and that subtotal is still falling.

The divergence matters because it’s not a blip. We’ve pulled the GACC category-level data for HS 28 through HS 39, cross-checked it against US Census import statistics and what our forwarder contacts are seeing in actual bookings, and the picture is consistent. Chinese chemical factories are running hot. They’re just running hot for somebody else. The tonnes your US contacts are bidding for are now being offered to European buyers, ASEAN formulators, and Southeast Asian distributors at margins the factory prefers.

This post walks through what the GACC data actually shows, where the displaced US tonnage is now going, why factory capacity is structurally rebalancing away from American buyers, what that means for your FOB quotes and lead times in Q2 and Q3, and the specific supplier conversations you need to be having this month.

What the March GACC Release Actually Says

GACC reported total goods exports of $279.7 billion for March, up 7.4 per cent from March 2023. Imports came in at $221.2 billion, up 1.9 per cent. The trade surplus widened to $58.5 billion. On the chemical side specifically, GACC category totals for HS 28 (inorganic chemicals) and HS 29 (organic chemicals) both rose year-on-year in tonnage terms, with HS 29 up approximately 6.8 per cent and HS 28 up around 4.1 per cent on a total-exports basis.

The destination breakdown is where the story turns. Chinese exports to ASEAN were up 10.6 per cent year-on-year. Exports to the European Union were up 3.8 per cent, which sounds modest but represents a reversal of the 2023 weakness. Exports to Russia were up almost 16 per cent. Exports to Latin America were up 8.1 per cent. Exports to the United States were effectively flat on a value basis, and down 2.3 per cent on a tonnage basis in the chemical subcategories we track closely.

So the headline growth is real. It’s just geographically selective. And the selectivity is not random. Chinese chemical factories have been doing the same arithmetic everyone else does when they price a shipment. A tonne of polyol sold to a European buyer at EUR 1,720 per MT FOB Shanghai nets the factory a different margin than the same tonne sold to a US buyer at USD 1,620 per MT FOB Shanghai once you factor in the currency hedge, the Section 301 overhang on the buyer’s side, and the payment terms most Chinese chemical suppliers are now willing to offer non-US customers. The Europeans are getting better quotes because the factories want their business more.

Why US Buyers Are Getting Deprioritised

There are four structural reasons US chemical buyers are slipping down the priority list at Chinese factories, and they’re compounding rather than substituting for each other.

First, Section 301 tariffs have been in place since 2018 on a lot of the chemical HS codes that matter most to the US import stream. List 3 tariffs at 25 per cent cover HS 2902, HS 2903, HS 2905, HS 2915, HS 2916, HS 2917, HS 2921, HS 2922, HS 2924, HS 2930, HS 2933, and a long list of HS 39 polymers and HS 32 coatings. A Chinese factory quoting a US buyer knows the buyer’s landed cost is already 25 per cent higher than a European buyer’s landed cost on the same goods. That asymmetry compresses the negotiable margin.

Second, the Chinese RMB has been trading in a range against the USD that’s less favourable for USD-denominated contracts than it was five years ago. A Chinese factory that sells FOB Shanghai in USD and repatriates earnings in RMB gets a different outcome in the current rate environment than it did under the 6.2 to 6.5 range that held for much of 2015 through 2019. The factory’s internal treasury function notices.

Third, payment terms are drifting. European buyers are writing payment terms at 60 to 90 days against bank documentary collection more commonly than US buyers, but the catch is that European buyers are also offering cleaner payment records, more stable volumes year over year, and fewer last-minute PO cancellations tied to Section 301 tariff news cycles. ASEAN buyers, particularly Vietnamese and Thai formulators, are increasingly offering LC at sight or 30-day terms against confirmed letters of credit from banks the Chinese sellers prefer to work with. US buyers, particularly the mid-market ones, are often on 45 to 60 day open terms with a history of payment delays. The factory credit team notices.

Fourth, and this is the one nobody writes about, the after-sales service burden on US customers has gone up. US environmental, TSCA, and CBP documentation requirements have tightened meaningfully in the past three years. Chinese factories that used to supply the US with a one-page COA and a generic MSDS now need to produce TSCA compliance statements, CBP 28 and 29 responses on demand, and full CAS-level documentation for every mixed preparation. That compliance overhead is expensive for the supplier, and if the margin on the US sale is already squeezed, some factories have quietly concluded that the US business is marginal even before the tariff is applied.

Where the Displaced US Tonnage Is Actually Going

If the US is getting less of the output, someone else is getting more. The GACC destination data for Q1 2024 gives us a clear picture on the chemical and polymer categories.

The ASEAN story is the most important one for US buyers to understand, because it has two layers. The first layer is genuine ASEAN domestic demand. Vietnamese coatings formulators, Thai polyol blenders, and Indonesian fertiliser distributors are all growing their volumes and buying more Chinese chemicals as direct inputs. The second layer is ASEAN as a trans-shipment and reprocessing hub. Chinese intermediate chemicals land in Vietnam or Thailand, get lightly processed, blended, or repacked, and then re-export to the US under a non-China country of origin. This is a known pattern and CBP has been increasing origin-verification enforcement, but the volume is still growing because the tariff arbitrage works even at elevated scrutiny.

The European growth is different in character. European chemical majors like BASF, Covestro, and Clariant have been rebalancing their own supply chains, and they’re buying more intermediate chemicals from Wanhua, Sinopec, and Zhejiang Juhua than they were five years ago. The European specialty chemical buyers have fewer tariff headwinds, cleaner compliance workflows, and in many cases longer-standing technical relationships with Chinese suppliers than the equivalent US buyers do.

What This Means for Your FOB Quotes and Lead Times

If you’ve been noticing that your FOB quotes from Chinese suppliers have been creeping up, or that your lead times have quietly slipped from eight weeks to ten or twelve weeks, this is why. The factory isn’t punishing you. The factory is simply pricing its output against the best marginal customer it can find, and you’re no longer that customer by default.

We’ve seen it clearly in three product categories this quarter. For MDI and TDI polyols, Wanhua’s FOB quotes to US buyers have widened their spread against FOB quotes to European buyers from roughly $40 per MT in Q1 2023 to $70 to $85 per MT in Q1 2024. For HS 3208 coating resins, quotes to US distributors have tightened on volume commitments, with the factories now asking for 12 to 18 month offtake guarantees to hold pricing where previously a quarterly PO was acceptable. For HS 2917 plasticisers, particularly DEHP and DINP, lead times to US destinations have stretched from 45 days at the quotation stage to 70 to 80 days, while lead times to European buyers on the same product have held near 50 days.

Your practical move is to assume these conditions persist and price your customer contracts accordingly. If you’re quoting a downstream US formulator or distributor on a fixed-price annual contract, build in a China-origin escalation clause tied to both the CNY-USD midrate and the GACC category-level tonnage trend. Your forwarder or your sourcing consultant should be able to give you the data; if they can’t, that’s useful information about who you’re working with.

The Landed Cost Comparison You Need to Run

Let’s work a realistic scenario. You’re buying 500 MT of a specialty plasticiser, CAS 28553-12-0 (DINP), from a Wanhua subsidiary for delivery into Houston over Q2. Your FOB Ningbo quote came in at $1,540 per MT this week, against $1,475 per MT in Q1 2023 at the equivalent seasonal quote. Your European counterpart, a Covestro-adjacent buyer in Rotterdam, is quoting the same product from the same factory at roughly $1,485 per MT FOB Ningbo, which is a $55 per MT spread against your quote for identical goods.

Here’s the per-MT landed cost picture for your US shipment:

The Section 301 line is doing most of the damage. At 25 per cent on top of the 6.5 per cent base duty, the US buyer is paying $485.10 per MT in combined duty that the European buyer doesn’t pay. The factory sees this and concludes that to generate equivalent net-landed competitiveness for the US customer, either the FOB needs to come down or the US customer needs to accept a materially higher landed cost than the European buyer. In practice, the factory does neither, and the US customer absorbs the gap.

If you’re in this position, the conversation to have with the Chinese supplier is not about matching the European FOB. It’s about predictability. Ask for a 12-month price lock in exchange for a volume commitment. Ask for a specific ocean freight allocation on a carrier string you prefer. Ask for priority loading at Yangshan or Ningbo with a guaranteed sail window. The factory may well give you those concessions because predictability is what the European and ASEAN buyers are also negotiating, and matching those terms is easier for the factory than cutting the FOB.

What to Actually Do Before Your Next PO

Three things this month, and they sequence.

First, pull your supplier scorecard and flag every Chinese supplier where your volume share has been under 20 per cent of their output for two or more years. Those are the suppliers where you are structurally deprioritised, and no amount of relationship work will change that. For those, start a parallel qualification process with a secondary supplier, ideally in a non-China origin that’s not a transshipment risk.

Second, for your core Chinese suppliers where you are a meaningful share of output, initiate a formal quarterly business review that includes tonnage share, FOB trend, lead time trend, and quality performance. Make the review bilateral, not one-way. Ask the supplier what they need from you to keep you on the priority list. The answers you get will tell you a lot about where you actually stand.

Third, for the GACC data itself, build a monthly dashboard for the HS categories you buy. It takes an analyst about half a day to set up. Track export growth by destination for the HS codes that matter to you. When the US destination line starts to diverge from the total, as it has in March 2024, you’ll see it before your FOB quote tells you.

Your next concrete action: before your next PO goes out to a Chinese chemical supplier, get the factory to confirm in writing its Q2 and Q3 capacity allocation to US customers as a percentage of total output, and benchmark that against the same number for Q2 and Q3 2023. If it’s declining, you need a plan B supplier in place by end of Q2, not end of Q3. The factories that are redirecting to Europe and ASEAN aren’t coming back to the US buyer list on the next tariff news cycle.