Neither Supermajors nor Deglobalisation are inevitable. Outcomes will instead be set by many individual choices that are coordinated in the rights ways. In other words, it is within the gift of Europe to wake up from Jim Ratcliffe’s “sleepwalk”.
Asian Chemical Connections
CFR China PE spreads hit a new record low because of all-time high oversupply
So far in 2024, despite supply tighter than it was in December last year, the average per tonne CFR China PE price spread over CFR Japan naphtha costs has fallen to its lowest annual level since we began our price assessments way back in 1993. 2022 and 2023 were the previous record lows.
Global demographics shape polyethylene demand yesterday, today and tomorrow
DEMOGRAPHICS SHAPE petrochemicals demand. As we consider the future, evaluate the different challenges of the G20’s Rich but Old, Poor & Old and Poor & Young G2O groups of countries.
China’s demographic crisis and the impact on global PP
If we are to see a repeat of 87% in 2024-2030 (the green line in the chart) and assuming my forecast of 2% demand growth is correct, the increase in global capacity would need to average just 154,000 tonnes/year during each year between 2024 and 2030. This is versus our base case of 4.5m tonnes/year of annual increases.
Global ethylene capacity growth would need to be 90% lower than the ICIS base case for healthy 2024-2030 operating rates
The blue line in the above chart involves annual average capacity growing at just 800,000 tonnes/year in each of the years between 2024 and 2030. This is versus our base case assumption of 7m tonnes/year of capacity growth during each of the years.
Supermajors versus Deglobalisation scenarios: The impact on petrochemicals and recycling
THERE ARE TWO scenarios or roads down which the petrochemicals industry could travel over the next ten years, with arrival either at Supermajors or Deglobalisation.
The scale of plans to turn oil into petrochemicals may radically reshape this industry
A petrochemicals world dominated by Supermajors, especially those running COTC plants, or one where greater regional cooperation (more on this in later posts) and increased protectionism allow older, smaller and less carbon efficient plants to survive.
The “National Champions” in the New Petrochemicals Landscape
SHORT-TERM tactics should involve maximising returns within regions along with a greater focus on exports anywhere in the world
Why the rest of the developing world cannot follow in China’s growth footsteps
The developing world outside China cannot repeat China’s economic growth model because of climate change, ageing populations in the West and sustainability
A fundamental shift in thinking on petrochemical plant closures
Environmental, social and political factors – along with integration into upstream petrochemicals – have held back plant closures. Now, things seems very different.
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