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
- 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
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Interview by Will Beacham
Read more analysis of chemical market trends in this week's ICIS Chemical Business.
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