BLOG: US PE exports in 2023 are not inevitably going to increase

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

US polyethylene (PE) exports will surge in 2023 because of the industry’s strong margin position and further increases in local capacity, is an argument doing the rounds.

Perhaps “good luck with that idea” because of:

• China PE consumption in in 2023 again falling short of expectations because of the muted economic recovery in China.
• The “lag effect” on global PE demand in 2023 of last year’s interest rates.
• The effect of a stronger US dollar on emerging market currencies, their sovereign debt servicing costs and the region’s PE demand.
• Another wave of new PE capacities in China – and new plants in Southeast Asia – that won’t necessarily be delayed or run at low operating rates, even if their margins are lower than in the US. This is because the projects are about nation building, job creation and supply security as well short-term profits.

But, of course, we could be wrong, so you need scenarios for US PE exports in 2023. The three scenarios in our post are as follows:

1. Low-case: US PE exports totalling just 9.8m tonnes versus last year’s 11mm tonnes.
2. Medium-case: 2023 exports at 11.4m tonnes.
3. High-case: US exports this year reaching 12.6m tonnes.

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.