Taiwan's petrochemicals industry has had a significant impact on the country's economic development. The nation, however, faces strong competition from regional producers that have the advantages of larger domestic markets and relatively lower labour costs. Taiwan is currently in the process of increasing its petrochemicals capacity to meet the revived domestic consumption and take advantage of export opportunities. Taiwan caters to both the domestic and the world markets, especially mainland China. It is able to fulfil the polymer demand needs of the mainland, as there is a supply surplus in Taiwan of the five major commodity polymers - polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS). The estimated 25% surplus of PE production - 1.08mn tonnes per annum (tpa) - has found a market in China. However, Taiwan's PE exports are facing strong competition from the Middle East, which is also targeting the Chinese market. With domestic PP demand at around two-thirds of nameplate capacity, mainland China is a prime export target. Around half of Taiwan's PVC production is also exported, while a substantial percentage of PS capacity (about 80%) enters the export markets.

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