EPCA ’23: Europe petchem markets in trough, no upturn expected for 2024

Katherine Sale


VIENNA (ICIS)–The European petrochemical markets are in a trough, with no demand upturn expected for 2024.

While sentiment at the European Petrochemical Association (EPCA) meeting in Vienna was not one of optimism, it was of resilience.

Demand is expected to remain at a low level for 2024; however, market participants did not expect conditions to worsen.

“Expectations of pick-up in demand in 2024 are based on hope, not market fundamentals,” said one chemical major.

“We will continue to play this game for another year and a half,” said one major producer.

While survival was the theme of last year’s event, flexibility became a key theme this year, with companies adapting to the ‘new normal’ for the markets.

The fall in gas prices provided some relief for European sellers, who were able to move into defence mode, lowering prices throughout 2023 and closing the window to material from Asia for some markets.

European operating rates remain low, and producers will be required to carefully manage balances next year.

“Next year will be a year of flexibility and adjusting,” said one producer.

“Flexibility will have a higher priority than in previous years,” commented a producer.

Heavy destocking has been seen across all markets, with players managing working capital closely given the ongoing financial pressures.

This will disrupt traditional destocking behaviour in the fourth quarter, with the value chain already at a depleted level.

“Destocking is over and we have reached a steady state,” said one seller.

The risk of the lower inventories was another key topic, with the potential for prices to spike sharply in the event of production outages, with a lack of buffer in the system.

Memories turned to 2008, after the economic crash and the last time the industry saw a significant downcycle, with the lower investment in facilities a risk for supply constraints once demand does increase.

This reinforced the need to corporation, flexibility and multiple supply options for buyers, already looking further ahead and strategically planning for after the current downcycle.

The EPCA annual meeting runs from 25-28 September.

Focus article by Katherine Sale

Front page image shows the Danube Canal in Vienna (image credit: Nicolas Economou/NurPhoto/Shutterstock)


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