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.
Asian Chemical Connections
UNTIL I FULLY understood the potential supply and industry economics implications of converting a lot more oil into petrochemicals, what’s happening to demand and the extent of China’s future self-sufficiency, I used to present charts such as the one above to clients with the proviso: “The good news is that this chart will almost certainly be wrong”. NOW I AM NOT SO SURE
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.
SHORT-TERM tactics should involve maximising returns within regions along with a greater focus on exports anywhere in the world
You might think it impossible for China to reach complete self-sufficiency in PE, PP, EG and PX. History suggests otherwise.
The developing world outside China cannot repeat China’s economic growth model because of climate change, ageing populations in the West and sustainability
Environmental, social and political factors – along with integration into upstream petrochemicals – have held back plant closures. Now, things seems very different.
There is a big new wave of lower-carbon and very advantaged cracker projects on the way, including Saudi Aramco’s crude-oil-to-chemicals investments.
HOW many PP company CEOs saw this coming, and what their plan now?
THE US gains $296m in China HDPE sales as Asian and Middle East exporters lose $1.4bn.