YEAR-ON-YEAR chemical company financial results could we improve in Q2-Q4 2023; But this should not be seen as a return to the Old Normal.
Asian Chemical Connections
India, climate change, demographics and polymers demand growth
Climate change and demographics are economic destiny – their effects cannot be avoided. But the petrochemicals industry has a huge role to play in shaping favourable outcomes
China’s long-term PP demand growth may turn negative, shifting the focus to value from volumes
STRONG upside PP demand growth scenarios for the rest of the world might still not enough to cancel out negative growth in China
US PE exports in 2023 are not inevitably going to increase
A SCENARIO-BASED approach is essential to understand US PE exports in 2023, based on non-plant economic factors
Diversification to other markets in 2023 crucial for PP producers because of China risks
China could be net exporter of 900,000 tonnes of PP this year, down from 2022 net imports of 3.2m tonnes This makes the other import markets more important for producers.
Collective wishful thinking could be behind the global polyethylene crisis
EVEN IF CHINA’S PE demand grows at 10% in 2023, with very strong growth in other regions, this year’s global capacity would still be 22m tonnes more than demand!
Global PE new supply and China spreads tell the real story
Global PE capacity in excess of demand is forecast to average 24m tonnes/year in 2022-2025, and to reach 26m tonnes this year
Operating rates are expected to average 81% in 2022-2025. This would compare with a 10m tonnes annual average capacityexceeding demand in 2000-2021 and an operating rate of 85%.
Your complete and updated outlook for global polyethylene in 2023
The strength of China’s post zero-COVID recovery in 2023 will be crucial, as will local operating rates as self-sufficiency further increases.
Another important factor: European gas supply next winter and the effect on local PE production.
Assessing confidence and the China PE demand recovery: More scenarios are needed
Scenario 2, my preferred scenario, would see China 2023 PE demand at approximately 38.5m tonnes – an average of 2% higher across the three grades than in 2022.
Cracker project announcements continue despite all-time high oversupply
Companies behind the crackers due on-stream over the next four years emphasise the low-carbon output. The planned new plant also have excellent economies of scale