In my downside scenario for China’s HDPE demand in 2023-2040 is correct, the country’s total consumption during this period would be 134m tonnes lower than the ICIS Base Case.
Asian Chemical Connections
We don’t have much time. We must act quickly to prevent potentially catastrophic social, political and economic damage from climate change.
Why dig more oil and gas out of the ground to make petrochemicals when the carbon cost is potentially ruinous for our climate? This might be a question increasingly asked by legislators, shareholders and the general public – rightly or wrongly.
AS overall demand growth declines,. PP consumption connected to real estate and infrastructure spending are especially at risk.
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.
CHINA’S POLYETHYLENE (PE) market has performed in a very mixed fashion so far in 2023, as the above chart tells us.
The annualised January-March 2023 data suggest a 3% fall in high-density PE (HDPE) full-year demand over 2022, a 3% in increase in low-density PE (LDPE) demand and a 4% increase in linear-low density PE (LLDPE) consumption.
The ICIS Base Case is already very conservative, assuming an annual average China PE demsnd growth of just 2% per year between 2023 and 2025 compared with 11% in 2000-2022. But I see average growth of only 1% or even minus 2% as perfectly possible.
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 PP net exports could be more than 2m tonnes in both 2024 and 2025. This would likely make China the fourth biggest exporter in Asia and the Middle East.
THE EARLY DATA suggest that China’s polypropylene (PP) demand could grow by 3% in 2023. This would be in line with the base case forecast I provided in February.