APIC And Demand

Business, China, Company Strategy, Environment, Europe, US
By John Richardson on 12-May-2013


Just an anomaly?



Source: American Chemistry Council


By John Richardson

FEEDSTOCK advantage is, of course, crucially important, but so is demand.

And yet the only subject that most people wanted to talk about in any depth at last week’s Asia Petrochemical Industry Conference (APIC) appeared to be how to achieve feedstock advantage.

Why? Probably because discussing the shale gas revolution in the US, how to transfer that revolution to Asia and other means of gaining competitive advantage, such as perhaps coal-to-chemicals in China and better refinery/petrochemicals integration, lie within the industry’s comfort zone.

Just because a subject is difficult shouldn’t lead to it being almost entirely sidelined – especially, of course, the subject of demand! Sadly, though, this is what it felt like was happening last week.

What worried the blog was that instead of in-depth discussions about scenarios for growth, delegates appeared to assume that while operating rates would be low this year and in 2014, everything would be back to normal by 2015. We have been waiting for everything to return to normal ever since 2008, but it hasn’t happened yet.

The idea that China might suffer an economic collapse wasn’t contemplated, or even that the headline 7.7% growth in Q1 might be a misleadingly bullish indicator of real economic activity.

Delegates also seemed to assume that Europe would somehow muddle through and that, obviously, it was Morning in America again.