By John Richardson

IT IS all about getting through the next 12 months with minimal damage whilst preparing for what the New Normal will look like when the COVID-19 crisis is over. I believe that changes in the nature of demand will be accelerated by the virus. These changes were already well underway before this crisis happened.

But right now, as I said, the immediate focus is getting through the next 12 months. So, in order to help you focus through all the noise, let me first start with a guide on what I see as the short-term challenges. I will revisit the long-term challenges in later posts.

For advice on how you need to respond contact me at john.richardson@icis.com. We can then work together, with  our ICIS team of pricing editors, analysts and consultants, to find solutions for your business.

Let’s start with what I see as the short-term challenges:

  • The industry is facing a crisis coming at it from many directions which is worse than 2008.
  • The sustained fall in oil prices means companies are holding very expensive inventories. These were built when oil was at $50/bbl – the price up until the start of March. As I flagged up on the blog before the OPEC+ production cuts were announced, no amount of cutbacks were going to compensate for the unprecedented loss of demand.
  • This means that apparent petrochemicals demand will reduce sharply in Q2 as companies destock up and down all the value chains.
  • A further risk is that panic buying of food and other daily necessities will stop. A destocking process could then take place in the polymers that go into packaging – PE, PET, PP and GPPS.
  • Lockdowns that affecting some 3bn people are causing a collapse in actual demand in key sectors such as autos and electronics.
  • There is no clarity on when demand in these sectors will recover and what the pace of the recovery will be like.

Solutions don’t have to be rocket science

When I pick up a newspaper these days (virtually of course), by the time I’ve read through it from the front cover to the very sadly very dull sports section as there is of course no sport, my head is literally spinning. Anxiety has gone through the roof about the financial and emotional impact on my family, friends and colleagues.

I am sure all of you out there are going through the same experience, both personally and for your businesses.

In the middle of all this harmful noise, we can so easily miss solutions that are hardly rocket science. Let me give you a personal example:

  • A friend runs a food wholesalers’ business. He’s had to lay off most of his staff because the majority of his business was supplying sporting events, concerts and small lunch-time cafes.
  • But he has quite successfully switched to selling directly to consumers.
  • One problem, though, is he has big lorries and small cargoes, a waste of space, fuel and time.
  • A group of us were discussing the problem and we suggested using out-of-work ride-hailing drivers.

Ideas like this will only come through a free exchange of ideas. So, again, we are here to help. Please contact me at john.richardson@icis.com.

PREVIOUS POST

China PP imports: Two scenarios showing downside risks for 2020

21/04/2020

John Richardson SOMETIMES you can forget what you already know. This was the cas...

Learn more
NEXT POST

Post-coronavirus world: How China could end up in a stronger position

26/04/2020

These are, always, my views only and not the views of ICIS Here is another of at...

Learn more
More posts
Rate of recovery hugely reliant on effectiveness of government policies
24/09/2020

By John Richardson UNLESS MORE action is taken by developed countries to help counter the impact of ...

Read
China bans on single-use plastics move forward with major recycling investments likely
22/09/2020

By John Richardson THIS EVENT slipped under most people’s radar in the midst of the pandemic crisi...

Read
Developing world polymers demand unlikely to see quick rebound
20/09/2020

By John Richardson THIS IS a tragedy in the genuine sense of the word, not just in the so-often misu...

Read
China’s policy dilemma: raising local demand while protecting exports
13/09/2020

  By John Richardson IN THIS Western-centric world, a huge amount of ink is split over the cons...

Read
China’s polyethylene demand good so far in 2020 but beware of risks ahead
10/09/2020

Note that all the comparisons in this post are on a year-on-year basis unless otherwise stated By Jo...

Read
Ah, I see: China’s booming demand mystery a little closer to being solved
08/09/2020

  Note that all the data comparisons below are on a year-on-year basis By John Richardson THE P...

Read
The China polyester mystery continues in a world turned upside down
07/09/2020

By John Richardson SOMETHING very strange is happening in China’s polyester industry which has eno...

Read
China will struggle to boost local retail sales during rest of 2020 with export outlook uncertain
04/09/2020

By John Richardson IF IT were easy, then there would be an oversupply of owners of large yachts in M...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more