GPCA ’23: Global polymer markets face another challenging year in 2024

DOHA (ICIS)–Global polymer markets can expect 2024 to be another challenging year, with demand likely to remain tepid.

Dull demand and oversupply are expected to persist for much of next year, industry sources said on the sidelines of the 17th Annual Gulf Petrochemicals and Chemicals Association (GPCA) Forum in Doha.

“We are not likely to see a major pick-up in offtake in the first half of 2024, and this may have an impact on polymer prices,” a trader from a global trading house said.

Some players are hoping for a demand pick-up in H2 2024, but this is not supported by concrete data, the trader said.

“We know that polymer business is cyclical and we see peaks and troughs. However, this time, the animal we are dealing with is something new – not seen before,” a second trader said.

China, the world’s second-biggest economy, has yet to see signs of a seasonal uptick in polymer demand in the run-up to the Lunar New Year in February.

There have been attempts throughout 2023 to rekindle overall consumption in the country via economic stimulus introduced by the government, but no significant success has been noted so far from the measures.

Europe may continue to grapple with tepid demand conditions, with high cost of production likely to drive down operating rates at petrochemical plants.

High interest rates and inflation are also expected to curb polymer uptakes in major markets.

Meanwhile, India remains a bright spot in Asia, as it has a more promising demand growth figures and could draw attention of suppliers across geographies.

In the absence of demand growth coming from bigger global markets, many suppliers have turned their attention to Africa.

“Africa is the new China, and we are putting in place our strategy, infrastructure and people to gear up for the demand growth set to come from the region in the years ahead,” a source at a major regional trading house told ICIS.

The 17th Annual GPCA Forum runs on 3-6 December in Doha, Qatar.

Focus article by Veena Pathare

Thumbnail image: Cargo ships preparing to dock at a container terminal in Lianyungang, Jiangsu province, China on 6 December 2023. (By Costfoto/NurPhoto/Shutterstock)