BLOG: Europe PP: Supply chain demand destruction and the need for a new business model

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. In the old familiar world, supply chains just worked. We didn’t have to worry about them.

But some of today’s problems with supply chains  have been building for years, which have been greatly exacerbated, of course, by the pandemic and the Ukraine-Russia conflict.

In European polypropylene (PP), as we discuss today, demand destruction is being caused by energy and semiconductor shortages etc.

There is no immediate end in sight to the disruptions, creating the risk that European PP demand growth is negative this year, as was the case in 2020 at the height of the pandemic.

We see it as unlikely that global supply chains will ever return to their “old normal” because of the big geopolitical re-alignments. These re-alignments – along with growing sustainability pressures – are why energy, petrochemicals and manufacturing are becoming much more localised.

It this localised model which offers a strong long-term future for European petrochemicals, if the industry focuses increasingly on carbon abatement and plastics recycling.

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.