SINGAPORE (ICIS)--Click here to see the latest blog post on Asian Chemical Connections by John Richardson.
Global supply chains have probably never been this stressed from shortages of wooden pallets, tins cans and cardboard to container freight and semiconductors. Petrochemicals supply is also exceptionally tight.
Supply-chain problems and strong demand mean there is an inflationary risk to the global economy.
As we have been warning about since January – which is confirmed by the Q1 petrochemicals data – China is undergoing a moderate slowdown because the supply-chain crisis has disrupted its exports.
Container-freight problems are not forecast to be fully resolved until Q4.
But ICIS believes there is enough container space to move US cargoes of polyethylene to Europe. US exports to Europe are expected to resume in a few weeks, once US domestic inventories have been refilled.
All the above underlines the need for better supply-chain intelligence and scenarios for Chinese and global petrochemicals demand.
Also watch the petrochemical price differentials between Europe and other regions. When differentials start returning to normal from today’s historic European premiums, this will indicate an easing of supply-chain problems.
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.