THE TEN REASONS why this isn’t a standard chemical industry downcycle
Asian Chemical Connections
Don’t put sustainability in a broom cupboard in the basement
How the chemicals world could re-align as sustainability becomes a new route to competitive advantage
China events suggest no global petchems recovery until 2026
Capacity growth of just 1.6m tonnes a year versus our base case of 5m tonnes a year would require substantial capacity closures in some regions. Closures are never easy and so take considerable time because of links with upstream refineries, environmental clean-up and redundancy costs – and the reluctance to be the “first plant out” in case markets suddenly recover.
China PP exports could reach 2.6m tonnes in 2024 as markets become ever-more complex
As recently as 2020, China’s PP exports for the whole year were just 424,746 tonnes. Between 2021 and 2023 they ranged between 1.3m to 1.4m tonnes. If the January-May 2024 export momentum were to continue for the rest of this year, full-year 2024 exports would reach 2.6m tonnes, double last year’s level.
A Personal View of the New Petrochemicals World
What follows is, as always on the blog, a personal view of how I see the petrochemicals world developing. There are no right answers, and the debate is the thing. That’s how we move forward together.
Chemicals, sustainability and the new industrial revolution
Blood bags, syringes, disposable hospital sheets, gowns and medicine packaging. Modern-day medicine, which has greatly extended the quantity and quality of our lives, would be impossible without the plastics industry.
As China volume growth is no longer guaranteed, focus on growing value
THE THREE EVENTS described are historic, meaning that the tremendous volume growth that the petrochemicals business has seen since 1992 could be largely over.
The focus therefore needs to switch to growing value
Global PE demand in 2024 could have been 74m tonnes lower if incomes and population drove the market
If population and incomes drove growth, global PE demand could have been just 52m tonne in 2024 versus the ICIS forecast of 126m tonnes. The China market could have been just 10m tonnes versus 43m tonnes; the Developing World ex-China 13m tonnes versus 44m tonnes and the Developed World 29m tonnes versus 38m tonnes.
Why China’s HDPE net imports could average just 700,000 tonnes per year in 2024-2030
RIGOROUS scenario planning is essential for China’s net import flows in 2024-2030
Three scenarios for China’s PE demand in 2024-2030 and the effects on global operating rates
UNDER all the scenarios, growth set to decline to the low single digits from 10% in 1992-2023.
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