Summary of 2023 Europe Outlook stories

ICIS Editorial


LONDON (ICIS)–Here are the Europe Outlook stories for 2023 published on ICIS news in December and January.

Global crude prices to remain volatile
Crude oil prices are expected to remain volatile throughout 2023, mostly driven by economic uncertainty and political unrest, as both issues will add pressure to fundamentals.

Europe olefins’ demand hand-to-mouth, sustained improvements only in H2
The lack of visibility over ethylene and propylene market conditions in 2023 is unprecedented, easily surpassing the financial crisis of 2008-2009.

Europe aromatics markets to see more painful months before slow recovery
Difficult conditions in Europe’s aromatics markets are expected to continue well into 2023 before they rebalance, according to market participants, with an outlook overshadowed by hobbled demand, cost volatility and vulnerability to external shocks.

Europe naphtha demand to improve, Russian sanctions to tighten supply
The Europe naphtha market ended 2022 on a volatile note and will remain volatile at the start of 2023.

Europe MX to lag behind pre-COVID-19 levels despite improved consumption
2022 has been a rough year for mixed xylenes (MX) in Europe mainly due to issues with gasoline and global events impacting chemical demand with no significant recovery prior to pre-pandemic levels.

Europe methanol prepares for difficult year on energy costs, weak demand
The European methanol market is bracing for another turbulent year with Russian sanctions pending, while high energy costs and lower consumer spending drive reduced demand for key end sectors.

Europe PE, PP players hope for uneventful year
A year of straightforward mundanity would be very welcome for most polymer players in 2023.

INSIGHT: Regaining Europe PET, PTA competitiveness key to survival
The Europe polyethylene terephthalate (PET) and upstream purified terephthalic acid (PTA) markets have to recover their competitive edge if they are to avoid becoming victims of production costs.

Europe toluene demand to start the new year slowly
Consumption in Europe has been mainly sluggish, with no pick up expected at least for the start of 2023.

Europe BD supply likely constrained, but at mercy of C2, C3
Butadiene (BD) production in Europe is likely to be constrained in 2023 as cracker utilisation is widely expected to remain at a low rate to offset much reduced ethylene (C2) and propylene (C3) contractual obligations.

Europe ADA and nylon 6,6 demand could stay subdued, output curtailments ongoing
European demand for adipic acid (ADA) and downstream nylon 6,6 collapsed in the second half of 2022, and is likely to remain low in 2023, as key downstream industries – automotive and construction – faced curtailed production due to bottlenecks in component supply, high production costs and soft end-buyer demand.

Europe PS and EPS markets to face further challenges in 2023, weak demand for at least Q1
The European polystyrene (PS) and expandable polystyrene (EPS) markets are expected to be pressured further by weak demand and ongoing uncertainty for 2023.

Europe biodiesel market faces volatility, slow spot demand
The European biodiesel market is set for a relatively stable 2023 in terms of supply-demand fundamentals, although uncertainty lingers over pricing volatility amid evolving supply chain factors.

Europe IPA, MEK and MIBK to be driven by wider economy, energy costs
The European solvents markets for isopropanol (IPA), methyl ethyl ketone (MEK) and methyl isobutyl ketone (MIBK) experienced volatility through H1 2022, largely driven by natural gas costs and technical issues at major producers, before softening through 2H 2022 on weak demand.

Europe ABS and SAN markets to remain pressured by demand destruction
The European acrylonitrile-butadiene-styrene (ABS) and styrene acrylonitrile (SAN) markets are expected to continue to be significantly pressured by weak demand.

Europe soda ash firm fundamentals steady but 2024 could bring another turning point
The European soda ash market is likely to stay on a similar track in 2023 to the one it was on in 2022, with a slight drop in demand, and shortage turning to tightness in some countries, while tightness turns into balanced-to-tight conditions in others in the coming 12 months.

European engineering plastics set for further demand uncertainty amid ongoing supply constraints
The European engineering plastics markets of polyacetal (POM) and polybutylene terephthalate (PBT) are expecting another dynamic year in 2023, with significant question marks over demand patterns and regional production.

Ammonia market almost impossible to predict following events of 2022
After a turbulent 2022 for the ammonia market, the outlook for 2023 remains unclear since its direction is so heavily influenced by developments in the gas market, particularly in Europe, which has become a post 24 February 2022 benchmark.

Europe oxo-alcohols demand recovery slow amid high energy costs, economic woes
After months of poor offtake, high uncertainty and oversupply, European oxo-alcohols sellers are keen to see the market rebalance in 2023.

Europe polyols market to remain under pressure
Demand and production for the European polyols market in the last part of 2022 was facing difficulties, with no real signs of recovery in 2023.

Europe plasticizers market faces rocky road with dull demand, import pressure
The outlook is uncertain for the European plasticizers spot market because of macroeconomic headwinds and high production costs.

Europe MA market could still grow in 2023 after hard winter
European maleic anhydride (MA) players are grinding their teeth and hoping for at best a gradual recovery from the weakest activity in three years.

Weak demand, import pressure to persist in Europe MPG market
Demand in the European mono propylene glycol (MPG) market is expected to remain lacklustre, especially in Q1, as macroeconomic headwinds and pressure from Asian imports persist.

Europe etac and butac demand to be buffeted by macroeconomic challenges
The European ethyl acetate (etac) and butyl acetate (butac) sectors are expected to face continued downward price pressure early this year, as demand from the key automotive, construction, ink coatings and flexible packaging industries remains weak

Europe PA could see supply tighten in 2023
Europe’s phthalic anhydride (PA) market is finishing the year early with most players away for the Christmas and New Year holidays and offices shutting down for the festive period, but there are positive signs from downstream markets.

Urea prices to stabilise after volatile 2022
Global urea prices are expected to stabilise in 2023 after touching historic highs in mid-2022 due to record gas costs with prices estimated to be lower compared to the previous year.

Economic woes to weigh on Turkish PE/PP demand
Economic issues will continue to plague the Turkish polyethylene (PE) and polypropylene (PP) markets and determine the outlook for these products in the first quarter of 2023.

Phosphates market to focus on China in 2023
The phosphates market will start 2023 with all eyes on China. Phosphates availability from China remains uncertain for the first quarter of the year. In the fourth quarter China had in place export quotas for phosphates to ensure domestic supply.

Jet kerosene demand to increase on relaxed COVID-19 restrictions
The outlook for the European jet kerosene market is optimistic for 2023, as the world reaches almost full recovery from COVID-19 travel restrictions.

Europe capro, nylon demand could stay low as consumer confidence slumps
European demand for caprolactam (capro) and nylon 6 could stay low in 2023, with automotive offtake expected to fluctuate across the year but remain subdued overall.

Underlying conditions for Europe recycled polyolefins players still volatile
The uncertainty and volatility that has plagued recycled polyolefins markets throughout 2022 is expected to continue into 2023, and forward planning remains a core challenge for the market.

European melamine Q1 demand remains weak; local production reduced on high energy costs
European melamine market conditions are expected to remain highly challenging for the first half of 2023.

INSIGHT: Chemical recycling to continue to scale up, mixed plastic waste access remains key challenge
2023 is likely to see continued high investment in chemical recycling in Europe – particularly for pyrolysis-based processes – with additional capacity coming on stream, particularly if the European Commission’s draft Packaging and Packaging Waste framework revision is adopted in to law.

Europe epoxy demand stifled by macro woes, Asian competition
The Europe epoxy resins demand outlook is cautious and muted for 2023, weighed down by ongoing macroeconomic headwinds and Asian competition.

European EO market worries over energy costs continue
Production cost uncertainty remains key for European ethylene oxide (EO) market players in 2023.

Europe BPA demand faces multiple challenges
European bisphenol A (BPA) demand is likely to face a rocky road in 2023, weighed down by ongoing macroeconomic headwinds and growing Asian capacity and competition.

INSIGHT: Europe fatty acid, alcohol markets face uncertainty, limited demand
European fatty acids and alcohols supply is likely to remain ample in 2023 while demand is lacklustre.

European refinery solvents spot market faces challenging Q1
Europe’s refinery solvents market will face a difficult first quarter in 2023 as recession fears, war and the energy crisis dampen market confidence.

Europe glycerine market to continue to rely on imports
The glycerine market in Europe will continue to see relatively constrained demand next year, and imports will continue to provide supply stability in the region.

Europe ECH demand caution high in challenging climate
The demand outlook for Europe epichlorohydrin (ECH) is cautious for 2023, amid ongoing macro-economic headwinds.

Muted European propylene glycol ethers buying interest to carry over into Q1
The first portion of 2023 is expected to remain challenging for sellers in the European propylene glycol ethers (PGE) market.

Slow demand, ample supply to carry over into 2023 for European e-series glycol ethers
Length seen in the e-series glycol ethers market is expected to continue into the first quarter, with some sources predicting that demand may begin to recover in the second quarter.

Europe R-PET to gain traction if market conquers early challenges
The outlook for Europe’s recycled polyethylene terephthalate (R-PET) market can be described as optimistic for Q2 and beyond, with some anticipating a return to pre-pandemic seasonality, although many uncertainties remain.

Europe acetic acid, VAM length in stark contrast to recent past
Weak consumption of acetic acid and its derivative vinyl acetate monomer (VAM) is likely to continue into 2023 and put significant pressure on prices that still stood far above historical levels at the end of 2022.

Europe OX faces supply headwinds, uncertain demand outlook
Concerns about potential episodes of supply tightness of orthoxylene (OX) in 2023 are growing among European players as talk about limited imports from Asia and upcoming plant shutdowns spread throughout the market.

Europe PX to remain long amid capacity expansions in Asia, weak demand
An oversupply of paraxylene (PX) in Europe remains a concern for 2023 as new production capacities are expected to start up in Asia.

Chlorine derivative trends, electricity to drive European caustic soda market
European caustic soda’s position as a co-product of chlorine is likely to be a key trend driver for the chemical in the coming year, as demand for chlorine derivatives such as polyvinyl chloride (PVC) and isocyanates is expected to be low through the first half of 2023.

Eurozone prospects improve but daunting long-term challenges remain
Economic indicators released in Germany and the wider eurozone in the past few weeks have given petrochemicals players hope the recession will not be as deep as feared.

INSIGHT: Global chemical operating rates plunge to 2008/9 levels, braced for storms ahead
The global chemical industry has cut operating rates to levels not seen since the 2008/9 financial crisis and the outbreak of the coronavirus pandemic in early 2020, with shrinking demand, over-capacity and spiralling energy costs clouding the outlook for next year.

Financing, energy costs, weak IPO markets to weigh on Europe chems M&A
Chemicals merger markets are set to be buffeted next year by the need to shore up capital reserves in the face of a prevailing high-cost, low-growth environment, volatile operating conditions and inaccessible initial public offering (IPO) markets.

INSIGHT: Poland’s PKN Orlen reaping benefits of energy foresight
As 2023 dawns, there will be few analysts able to look back on the tumultuous events of the preceding year with an air of “I told you so”.

Automotive sector hits the brakes for growth prospects
Conditions have been challenging for the automotive industry in recent years, and no immediate reprieve is expected in the near term against a backdrop of geopolitical volatility.

Europe LPG cargoes to start weak but Russian embargo to lend support
Muted sentiment across much of Q4 for the propane market in Europe is expected to carry over into 2023, as key downstream petrochemicals markets face ongoing headwinds.

Pricing outlook murky for global potash fertilizer market
The global muriate of potash (MOP) fertilizer market remains in a state of unprecedented change as 2023 dawns, following two years of political turmoil, seemingly endless supply stability concerns, and all-time-high prices in some regions.

European acrylates gripped by uncertainty
The European acrylic acid (AA) and acrylate ester markets will be in the grip of uncertainty for much of 2023, following a volatile 12 months.

Europe PVC demand weak, uncertain due to variable ECU costs
Europe’s polyvinyl chloride (PVC) market has been through several tumultuous years since 2019, notably the coronavirus pandemic and the Russia-Ukraine war and its impact on energy prices.

Europe TiO2 players brace for continued headwinds, uncertainty
Ongoing macroeconomic concerns and Chinese spot export competition are likely to continue to cast a shadow over European titanium dioxide (TiO2) demand into 2023.

Europe PC demand recovery a distant prospect
Players in the European polycarbonate (PC) market are betting that they will have to wait until Q2 2023 – in the best-case scenario – before demand recovers.

Weak European ethanolamines demand to carry over into Q1
Many participants in the European ethanolamines are preparing for a slow start in 2023 with few expecting to see any notable recovery to end user demand much before the end of Q1 to early Q2.

NWE paraffin wax demand to be driven by fragile, uncertain macroeconomic climate
Pricing for all fully refined grades in the northwest Europe (NWE) paraffin wax markets reached its highest for 2022 at the beginning of May, mainly due to poor availability of product in the face of robust demand.

INSIGHT: Europe BDO market under pressure from imports, demand uncertainty
The European butanediol (BDO) market is expected to remain under pressure from cost-effective imports as well as continued demand uncertainty in 2023.

Europe MTBE, ETBE face upstream volatility, stable demand
The European methyl tertiary butyl ether (MTBE) and ethyl tertiary butyl ether (ETBE) markets are set for stable demand levels through 2023, despite upstream uncertainty.

Europe isocyanates face hurdles for demand recovery
After a period of low consumption in 2022 for European toluene diisocyanate (TDI) and crude methylene diphenyl diisocyanate (MDI), no significant rebounds are forecast for 2023.

European MEG import supply lower, demand uncertainty continues
European monoethylene glycol (MEG) supply could reduce at the start of next year as local operating rates remain low due to unfavourable selling conditions. Imports could also be low because of high freight rates from the US to Europe.

No clear map for sulphuric acid price direction
Amid a world in turmoil – as economies recover from a worldwide pandemic, Russia’s invasion of Ukraine causes energy and natural gas prices to spike and the spectre of global food security teeters on the edge of collapse – it is little surprise that sulphuric acid prices have seen a bit of a rollercoaster ride in the last year.

European SBR demand expected to remain weak in Q1
European styrene butadiene rubber (SBR) demand is expected to remain weak in the first quarter of 2023 and it is currently unclear when the situation will improve.

European base oils market braces for impact of Russian oil products embargo
The European base oils market is approaching a pivotal moment for domestic production as sanctions on Russian oil products are set to begin in February 2023.

Europe ethanol faces uncertain supply-demand dynamics
The European ethanol market is set for an uncertain 2023, as various evolving supply and demand factors will continue to shape the market.

Europe phenol, acetone to navigate weak demand, high costs
The outlook for H1 2023 matches the story in H2 2022 for Europe’s phenol and acetone markets – low demand combined with high gas costs.

Europe ACN flexibility key to cope with fragile, uncertain conditions
The European acrylonitrile (ACN) markets are braced for an incredibly difficult six months ahead but players have adjusted the goal posts and flexibility has been the biggest requirement from both sides.

Supply and demand questions dominate European MMA outlook
Uncertainty around supply and demand in Europe are the key issues facing European methyl methacrylate (MMA) players heading into 2023.


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