PODCAST: Ethylene cycle points to project cancellations, overcapacity

BARCELONA (ICIS)–Analysis of the ethylene margin cycle suggests challenging conditions for producers in 2020, as new capacity and poor demand forces the cancellation of new projects and global rationalisation of assets.

– Profitability under pressure in 2020 compared with 2019
– Ethylene margins were dipping before coronavirus outbreak
– Expect project delays/cancellation where no final investment decision (FID) has been made
– Shift in new projects from US to China (more than 10m tonnes 2020/21)
– New China polyethylene (PE) capacity will be run hard
– China may become net exporter of PP, import less PE
– Expect Europe to become a more local chemicals market
– Impact of Europe’s 2050 climate neutral target and virus recovery plan
– Automotive switch to electric vehicles to accelerate
– Oil prices could fall into Q3, destocking in chemicals
– Demand may return to pre-virus levels 2-3 years
– Move from denial to anger about pandemic

Listen to this podcast interview with Paul Hodges, chairman at consultancy International eChem; John Richardson, ICIS senior consultant, Asia;  ICIS Insight Editor Nigel Davis and James Wilson, senior analyst in Europe for ICIS.

Interview by Will Beacham

Read more analysis of chemical market trends in this week’s ICIS Chemical Business.

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Read Paul Hodges ICIS Chemicals and the Economy blog

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