The great wave of destocking is finally coming to an end. And it is clear that underlying global demand is well below previous "normal" levels.
The evidence for this can be seen in the above chart, based on American Chemistry Council data, which shows global chemical production down 12.8% in April versus 2008. And as Nigel Davis noted in ICIS Insight last week, BASF (the world's largest chemical company), has said that it is "operating worldwide at less than 75% of operating capacity".
The ACC's data covers 33 key countries, who probably have slightly better competitive positions that other producers. Thus a decline of 15 - 20% is probably a reasonable estimate, and would also correlate with the BASF data (as effective maximum operating rates are c95%).
This is not a good starting point as we enter H2. Not only will more capacity be starting up for many products in the Middle East and Asia (particularly China). But also Q3 is normally seasonally slow, whilst year-end cash management is likely to mean December demand will be weak.