SHORT-TERM tactics should involve maximising returns within regions along with a greater focus on exports anywhere in the world
Asian Chemical Connections
The developing world outside China cannot repeat China’s economic growth model because of climate change, ageing populations in the West and sustainability
Flat 2023-2050 demand growth in China and the developed world would leave the global market for nine synthetic resins 1bn tonnes smaller than the ICIS base case.
China’s cumulative HDPE demand under the downside scenario would be 97m tonnes lower than our base case. in the above chart
During this downturn, razor-like focus on fluctuating netbacks and supply and demand among all the different countries and regions will allow producers to ensure that they don’t make product for markets where there is no demand, while ensuring that they take maximum advantage of many brief periods of stronger demand and pricing.
Capacity exceeding demand is forecast to reach 218m tonnes this year from a 1990-2022 annual average of 76m tonnes.
The decline in container freight rates has opened the SEA PE market to more competition – pulling the region’s spreads closer to the record-low China levels
EVEN if China’s PP demand growth is 14% this year – double our forecast – and growth in other regions is higher than we expect:
Global capacity in excess of demand would be 18m tonnes in 2023 compared with a 8m tonne/year average in 2000-2022,
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
China’s LLDPE demand in 2023 could either grow by 3% or contract by as much as 6%, depending on whether or not China successfully exits zero-COVID