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
Asian Chemical Connections
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
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.
Overstocking may have boosted China PE demand as the US continues to win while others lose
THE US gains $296m in China HDPE sales as Asian and Middle East exporters lose $1.4bn.
Winners and losers as demographics, debt, sustainability, geopolitics and crude-to-chemicals rewrite the rules of success
I BELIEVE WE are heading for the biggest period of change in the global petrochemicals industry since the 1990s.
This was when globalisation took off with the formation of the World Trade Organisation (WTO), when China’s economic boom began, when the global population was more youthful and before climate change became a major threat to growth.
Major PE exporters to China see their sales fall by a further $1 billion
THE BIG PE exporters to China saw their sales to country decline by a further $1bn year-on-year in January-July 2023 versus January-June 2023.
Big HDPE exporters see another $700m of estimated China sales losses in one month
NINE OUT OF CHINA’S top 10 high density polyethylene (HDPE) import partners saw their sales to China fall by an estimated total of $1.8bn in January-July 2023 versus the same period last year. Meanwhile, the remaining member of the top 10, the US, saw its sales increase by $233m.
An almost perfect LLDPE buyers’ market as major producers see big China sales declines and losses in export volumes.
SEE ABOVE estimated LLDPE H1 2023 sales in China versus average H1 1999-2022 sales. Total estimated losses amounted to $594m among some of the big global producers.
China’s HDPE imports from the US surge more than triple as South Korea and Saudi Arabia and the UAE lose ground
As China’s overall high density PE (HDPE) imports fell to 2m tonnes in January-May 2023 from 2.5m tonnes during the same period last year, the US’s share of China’s import market jumped to 13% from 3%. Year-on-year imports from the US rose by 335% to 268,892 tonnes.
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