HDPE and PP pricing in key market outside China continues to fall towards levels in China, the blog’s new weekly index shows
Asian Chemical Connections
A perfect global PP storm: China’s collapsing demand and rising capacity
THIS IS A POLYPROYPENE ((PP) world being turned upside down. China has entered a period of lower growth with capacity additions so big that imports are collapsing as China also starts to substantially increase exports.
European PE and PP: Energy cost and demand crisis gathers momentum as pricing falls closer to China levels
The chart shows European
dependence on Russian gas compared with country-by-country percentages of the region’s total PE capacity, Germany is the standout risk country as it has a nearly 50% reliance on Russia for its gas supplies with a total of more than 70% of Europe’s PE capacities across the three grades. In the case of the Netherlands, it is the location for just under 40% of capacities with its dependence on Russian gas at around 20%.
China LDPE demand in 2022 could fall by 8%, which would be worst year since 1990
Annualised January-June China LDPE data only indicated a 4% decline in full-year demand. What a difference a month has made. The January-July numbers point to an 8% fall in demand this year. This would be the worst annual fall in growth since 1990.
China’s HDPE market is the weakest since at least 1990
As the chart above shows, the spreads or differentials between China CFR HDPE injection grade prices and CFR Japan naphtha costs are this year the lowest they have been since 1990.
If you think this is a typical chemicals downcycle, think again
THERE IS A FEELING out there that the chemicals and polymers industry is undergoing a typical downcycle that will last a few years, followed by yet another spectacular fly-up in margins. But I believe a great deal more is happening beyond the usual cycles of over-building followed by under-building.
China’s LLDPE demand weakness continues as net import prospects weaken
China’s LLDPE demand is in line to fall by 4% this year with its net imports 800,000 tonnes lower. This would follow a 1.1m tonne decline in net imports in 2021 over 2020.
Latest China PP spreads, margin and demand data show market remains at multi-decade lows
The average China PP price spread in 2022 up until 19 August, was just $262/tonne. This compares with the previous annual record low of $430/tonne in 2003.
The rules of the chemicals game are changing as companies pay the penalty for “growth for growth’s sake”
Because companies in all manufacturing and service sectors haven’t been adequately charged for the natural resources they use, and the damage they cause to the environment, we face the risks of catastrophic climate change and more plastic in the oceans than fish.
European PE pricing, margins and spreads versus China and the risks of a correction to long-term historic patterns
THE CHEMICALS AND polymers world is behaving in ways that our industry has probably never seen before. A good example are the relationships between European and Chinese PE pricing