BLOG: This is the first significant chemicals downcycle for many years
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.
The polyolefins industry has been so, so lucky as every other downturn during the last 25 years has been brief and mild. Not this time, though.
But, with the right data and analysis (see the sample slides in today’s post), polyethylene (PE) and polypropylene (PP) producers can successfully ride all the zig-zag lines of mini price rallies and declines as we head towards the bottom of this cycle.
What’s required is an integrated global approach of netback, demand and supply analysis to take advantage of opportunities such as:
- Northwest Europe, Southeast Asia, Vietnam, Turkey, India and Pakistan high-density PE (HDPE) film-grade price premiums over China that still averaged $163/tonne in September this year despite recent declines.
- Net HDPE imports across all the grades that are forecast to total 4.6m tonnes in 2022 in Europe, Turkey, some countries in Southeast Asia, India and Pakistan. This compares with an estimated 5.6m tonne of China net imports in 2022.
- Northwest Europe, Southeast Asia, Vietnam, Turkey, India and Pakistan PP injection-grade premiums that still averaged $154/tonne over China in September – again despite recent declines.
- PP net imports for all the grades that are forecast to total 6.9m tonnes in 2022 in Europe, Turkey, some countries in Southeast Asia, India and Pakistan. This compares with an estimated 2.5m tonnes of China net imports in 2022.
Despite the extent of today’s challenges, you can emerge as a Winner.
Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.
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