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Eastman invest $1bn in French hard-to-recycle PET waste chemical recycling facility
LONDON (ICIS)–Eastman is to invest up to $1bn in a hard-to-recycle polyethylene terephthalate (PET) waste methanolysis-based chemical recycling facility in France, the US chemicals major said on Monday. The facility would use Eastman's polyester renewal technology to chemically recycle up to 160,000 tonnes/year of hard-to-recycle PET waste via a methanolysis depolymerisation unit. The total output capacity of the facility was not stated. Eastman’s polyester renewal technology uses PET waste, such as soft drink bottles, carpet and polyester-based clothing, to convert back into their basic monomers, using either glycolysis or methanolysis. Alongside the depolymerisation unit, the multi-phase project includes units that would prepare mixed plastic waste for processing and polymer lines to create a variety of first-quality materials for specialty, packaging, and textile applications. Eastman also plans to establish an innovation centre for molecular recycling – a term used to describe chemical recycling – that would enable France to sustain a leadership role in the circular economy. The plant and innovation centre is expected to be operational by 2025. Eastman CEO Mark Costa said agreements related to securing the plastic waste that will be raw material supply, securing government incentives, and a decision on the location of the site will be made in the coming months. LVMH Beauty, The Estée Lauder Companies, Clarins, Procter & Gamble, L'Oréal and Danone are signing letters of intent for multiyear supply agreements from this facility. Front page picture: Eastman's CEO meeting French President Emmanuel Macron in Paris Source: Michel Euler/POOL/EPA-EFE/Shutterstock Additional reporting by Mark Victory ICIS has launched a new mixed plastic waste pricing service covering European prices for mixed-polyolefins waste bales, reject refuse-derived fuel (RDF) bales and reject materials recovery facility (MRF) bales. Along with this, the new service covers emerging trends in the chemical and mechanical recycling markets, as well as the burn-for-energy sector. To subscribe to the new pricing service, or for further information, please contact firstname.lastname@example.org
Russia’s PVC output up 3% in 2021
MOSCOW (MRC)–Russia’s production of polyvinyl chloride (PVC) stood at slightly over 1m tonnes in 2021, up 3% year on year, according to a MRC’s ScanPlast report. Among the large producers, RusVinyl’s PVC output stood at 349,400 tonnes in 2021, up 4.8% year on year, while SayanskKhimPlast produced 309,300 tonnes, up 3.5% Baskhir Soda Company produced 268,200 tonnes of PVC in 2021, flat year on year, while Kaustik’s output stood at 80,300 tonnes, up by 5% year on year. MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.
European PVC prices for export to CIS markets steady since November
MOSCOW (MRC)–European polyvinyl chloride (PVC) producers have rolled over December export prices for January shipments to the CIS countries due to stable ethylene, according to the ICIS-MRC Price report. The January contract price of ethylene was agreed at the previous month’s level, which pointed to steadiness of the net cost of PVC production. Strong demand for resin also remained in Europe, including from some export markets, and these conditions maintained high prices. Most producers rolled over December export PVC prices for January shipments, which virtually corresponded to the level of November. There was a shortage of PVC in Europe during the whole of 2021 because of scheduled and unscheduled maintenance shutdowns and lower imports. The supply of PVC has begun to gradually increase in the market for the past two months but it is far from being saturated. In addition, interruptions in the work of some producers remain. In January, European producers were in no hurry to adjust their export prices for the CIS countries and, in fact, maintained them in the range of €1,650-1,710/tonne FCA (free carrier), which mostly corresponded to the levels of November and December. At the same time, it should be noted that supply of PVC for shipments from the US has grown significantly since December. The key suppliers announced their offer prices for February shipments at $1,700/tonne CFR (cost and freight) and lower. (€1 = Rb87.12, $1 = Rb76.31) MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan.
TOPIC PAGE: Sustainability in the fertilizers industry
Updated on 17 January. On this topic page, we gather the latest news, analysis and resources, to help you to keep track of developments in the area of sustainability in the fertilizers industry. LATEST NEWS HEADLINES India’s Reliance to invest $80bn in green energy projects By Priya Jestin 17-Jan-22 04:41 MUMBAI (ICIS)–India’s petrochemical major Reliance Industries Ltd (RIL) plans to invest Indian rupees (Rs) 5.95tr ($80bn) in green energy and other projects in western Gujarat state as it aims to achieve its net zero carbon emissions target by 2035. Yara, Sweden’s Lantmannen aim to commercialise green ammonia by 2023 By Jonathan Lopez 13-Jan-22 13:43 MADRID (ICIS)–Yara and Swedish agriculture co-operative Lantmannen are aiming to commercialise ammonia produced with renewable energy by mid-2023, the Norwegian fertilizers major said on Thursday. Novatek and Uniper target Russia to Germany blue-ammonia supply chain By Richard Ewing 22-Dec-21 12:14 LONDON (ICIS)–Russia's Novatek and Germany's Uniper on Wednesday agreed a term sheet (non-binding deal) for the long-term supply of up to 1.2m tonnes/year of low-carbon (blue) ammonia, primarily for the German market. Fertz giant Yara goes green with electrification of Norwegian factory By Richard Ewing 17-Dec-2021 LONDON (ICIS)–Scandinavian fertilizer major Yara was on Friday granted the local equivalent of $32m for a green ammonia initiative at its large Herøya plant in Norway that will see hydrogen produced from renewable energy rather than liquefied fossil gas. Canada Arianne Phosphate exploring use of phosphate for hydrogen technology By Mark Milam 16-Dec-21 20:56 HOUSTON (ICIS)–Arianne Phosphate announced it is working with the University of Quebec at Three-Rivers (UQTR) to assess the use of Arianne's high-purity phosphate concentrate in electrolysers that produce hydrogen for use in hydrogen fuel cells. FAO and IFA renew MoU to promote sustainable fertilizer use By Erica Sesay 13-Dec-21 17:05 London (ICIS)–The UN’s Food and Agriculture Organization (FAO) and the International Fertilizer Association (IFA) renewed their Memorandum of Understanding (MoU) on Monday, agreeing to promote the sustainable use and management of fertilizers. Sumitomo Chemical, Yara to explore clean ammonia collaboration By Nurluqman Suratman 10-Dec-2021 SINGAPORE (ICIS)–Sumitomo Chemical and Norwegian fertilizer major Yara have agreed to explore a potential tie-up to advance the use of clean ammonia, the Japanese producer said on Friday. US fertilizer producer Mosaic broadening environmental stewardship commitment By Mark Milam 09-Dec-21 21:48 HOUSTON (ICIS)–US fertilizer producer Mosaic said it is broadening its commitment to environmental stewardship by announcing targets to achieve net-zero greenhouse gas emissions in Florida by 2030 and companywide by 2040. OCI and Navigator strike CO2 transportation and storage deal in Iowa By Richard Ewing 29-11-21 LONDON (ICIS)–Iowa Fertilizer Company (IFCo) facility has teamed up with Navigator CO2 Ventures to provide CO2 transportation and storage services on the latter’s carbon capture and storage (CCS) system, the Heartland Greenway, IFCo's Dutch parent OCI disclosed on Monday. Sri Lanka revokes ban on imports By Deepika Thapliyal 24-Nov-21 10:47 LONDON (ICIS)–The private sector will be permitted to import chemical fertilizers including urea, nitrates, phosphates and potash from today, Agriculture Minister Mahidananda Aluthgamage said. Fertz major Yara launches world's first electric and self-propelled container ship By Richard Ewing 19-11-21 LONDON (ICIS)–The world's first electric and self-propelled container ship – Yara Birkeland – on Friday made its maiden voyage in the Oslo fjord, Norwegian fertilizer major Yara announced. Australia's Woodside secures site for green ammonia/hydrogen project By Richard Ewing 12-Nov-21 12:11 LONDON (ICIS)–Australia's Woodside said Friday it had secured land for its proposed H2TAS hydrogen plant, as the energy producer looks to develop large-scale production of green (renewable) hydrogen and ammonia. Australia's Fortescue to convert offshore vessel to run on green ammonia By Richard Ewing 11-Nov-21 12:50 LONDON (ICIS)–Australia's Fortescue Future Industries (FFI) on Thursday announced that a high-tech vessel powered almost completely by green ammonia will hit the water in 2022. EU CARBON BORDER ADJUSTMENT MECHANISM (CBAM) EXPLAINED What is it? The risk of carbon leakage frustrates the EU’s efforts to meet climate objectives. It occurs when companies transfer production to countries that are less strict on emissions, or when EU products are replaced by more carbon-intensive imports. This new mechanism would counteract this risk by putting a carbon price on imports of certain goods from outside of the EU. How will it work? EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods, the corresponding cost can be fully deducted for the EU importer. This will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to make their production processes greener. A reporting system will apply from 2023 with the objective of facilitating a smooth roll out and to facilitate dialogue with non-EU countries. Importers will start paying a financial adjustment in 2026. How is the fertilizer industry affected? The fertilizer industry is one of the sectors to fall under the CBAM. The more energy-intensive nitrogen fertilizers will be affected most in the sector by the mechanism. DEFRA CONSULTATIONS EXPLAINED The UK’s Department for Environment, Food & Rural Affairs (DEFRA) launched a consultation at the beginning of November 2020 on reducing ammonia emissions from urea fertilizers. The consultation ran until 26 January 2021. It set out three options for tackling ammonia emissions: A total ban on solid urea fertilizers A requirement to stabilise solid urea fertilizers with the addition of a urease inhibitor. A requirement to restrict the spreading of solid urea fertilizers to between 15 January and 31 March of a given year. Liquid urea is excluded from any new rules or restrictions. DEFRA is currently analysing the feedback received. Should it decide to restrict the use of urea, that would leave growers with just ammonium nitrate-based fertilizers. PREVIOUS NEWS HEADLINES Sri Lanka encourages transition to organic fertilizer at COP 26 Tokyo scientists convert bioplastic into nitrogen fertilizer Aramco plans Saudi green hydrogen, ammonia project China announces action plan for carbon peaking & neutrality Saudi Aramco targets net zero emissions from operations by 2050 BLOG: China provides major climate hope as latest IEA report underlines that it is all about the developing world Fertiglobe goes green with Red Sea zero-carbon ammonia pro Australian fertilizer major Incitec Pivot teams up for green ammonia study Yara partners up to explore clean ammonia bunkering and distribution in Japan Fertilizer Canada concerned cutting fertilizers to meet emissions target could impact farmers Yara and Kyushu Electric Power explore clean ammonia collaboration in Japan INTERVIEW: BASF to scale up new decarbonisation tech in second half of decade – CEO Australian Minbos Resources completes bulk sample from Cabinda Phosphate project India asks fertilizer companies to speed up production of nano DAP Japan's Itochu set to receive first cargo of blue ammonia for fertilizer use Norway's Yara acquires recycled fertilizers maker Ecolan Bayer Funds US start-up aims to cut nitrogen fertilizer use by 30% ADNOC concludes fresh sale of blue ammonia from the UAE to Japan Ostara Nutrient Recovery Technologies selects St Louis for new Crystal Green fertilizer facility India to launch $1.35tr infra plan, enhance green hydrogen output Norway Yara partners with Aker, Statkraft to launch green ammonia firm Blue and green ammonia to advance rapidly BP: Green ammonia production in Australia feasible, but needs huge investment Origin and MOL explore shipping green ammonia from Australia India’s IFFCO seeks to export nano urea fertilizer Sri Lanka reinstates ban on import of chemical fertilizers Nutrien to cut greenhouse gas emissions 30% by 2030 RESOURCES IFA – Fertilizers and climate change TFI – Sustainability report
EPCA plans in-person annual event in October
MADRID (ICIS)–The European Petrochemical Association (EPCA) is to hold an in-person annual forum on 4-6 October in Berlin, subject to pandemic developments, the trade group said on Monday. It will be EPCA’s 56th annual event. The group’s last two annual events were held virtually due to travel restrictions brought about by the COVID-19 pandemic. “The event is planned as an in-person event. The team is monitoring and will follow the latest health and safety measurements,” said the trade group’s CEO in a letter to EPCA member companies. EPCA’s financing partly depends on the annual event attendees’ fees, from which the trade group has been deprived for two consecutive years. Some of the financing also comes from companies’ membership fees. In her letter to members, Caroline Ciuciu thanked them for their “essential contribution”. “A dedicated email with the membership invoice will be sent to the billing contact in the course of January 2022," she concluded.
Americas top stories: weekly summary
HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 14 January. December IPEX down 6% on sharp price drops in northeast Asia, US The ICIS Petrochemical Index (IPEX) dropped by 6.2% month on month in December, tracking price declines across the main petrochemical and plastic global markets, not least in northeast Asia and the US. Domestic PE prices move lower for January in Brazil Domestic polyethylene (PE) prices for January were nominated with decreases in Brazil, according to market sources. New COVID outbreaks in new year likely to impact cargo movement – Maersk The container shipping industry is continuing to battle with congested ports and labour issues, including outbreaks of COVID-19 in the area surrounding one of China's largest ports that are making it harder to move product from region to region. US Huntsman faces activist investor shake up at AGM US investor Starboard Value has nominated four candidates to the board of directors for election at chemicals major Huntsman's next annual general meeting (AGM). Celanese lifts Americas force majeure on VAM, issues sales control US-based acetyls producer Celanese has lifted its force majeure on vinyl acetate monomer (VAM) in the Americas. Shipping container rates from China to US on rise again Rates for shipping containers from east Asia and China to both US coasts are on the rise again as US consumers’ demand for goods shows no signs of easing.
European coal generation to extend resurgence
LONDON (ICIS)–European coal-fired power generation is set to build on its 2021 resurgence with prevailing fuel switching ranges indicating further gas-to-coal switching is likely this year, analysis by ICIS showed. The revival of coal across Europe comes at an uncomfortable time, with governments stepping up their commitments towards the phasing-out of the technology. But against the backdrop of soaring gas and power prices, generation economics have swung firmly in favour of greater coal-fired output. Moreover, frequent spells of low renewable supply mean that coal-fired generation was at times an essential part of meeting national power demand. EUROPEAN COAL REVIVAL Across northwest Europe, the largest annual rise was seen in France, which almost recorded a three-fold increase in coal generation. Most of this was seen in the final quarter of the year, which coincided with record low availability of its vast nuclear fleet. Increased coal generation is expected to persist for the remaining winter months, after the Ministry of Ecology published a draft decree permitting greater coal-fired generation across the first two months of this year. The decree also outlines a lower threshold for the remaining months of the year, to offset greater production over the peak winter consumption period. However, further outage extensions at key nuclear reactors have since lowered EDF’s nuclear production target for 2022 by around 10% to 300-330TWh. This means that greater coal output will be required again next winter if France is to ensure security of electricity supply. The resurgence of coal is even more remarkable given the closures of multiple plants across Europe. In the UK, Drax units 5 and 6 and EDF’s West Burton A both ceased commercial operations in March 2021 but are available to be called upon through the balancing mechanism by National grid. This leaves Uniper’s Ratcliffe-on-Soar as the last commercial facility in the UK. FUEL SWITCHING OUTLOOK In Europe, Germany holds the largest fuel switching capability given its expansive gas, coal, and lignite capacities. Current generation economics point away from gas-fired generation and towards coal, with near-term fuel switching costs consistently above triple digits since late September. As coal emits relatively more emissions than gas-fired power, its overall costs are more responsive to carbon prices. Fuel switching costs indicate how much the EUA price would need to change to make the profits between gas- and coal-fired power plants equivalent. Month-ahead fuel switching costs for an average coal (39% efficiency) to gas-fired power plant (50% efficiency) were at €154.38 on 13 January. Fuel switching costs remain positive out to 2023, indicating further gas-to-coal switching is likely within the parameters of available capacity. EUA PRICE DRIVERS One aspect of high fuel switching costs can be explained by the decoupling of carbon from gas market dynamics. The correlation between the nearest December EUA and the ICIS TTF year-ahead price fell to 0.61 for the fourth quarter of 2021, compared to a coefficient of 0.83 for the first three quarters of the year. Correlation describes the strength of association between two variables, with a coefficient of 1 representing a perfect positive correlation between the pair. As carbon has fallen well below fuel-switching ranges, EUA prices have lost their economic anchor. This has resulted in an increase in intraday volatility, with prices more susceptible to movement from market events that do not necessarily have a fundamental basis. With gas prices continuously supported by lingering risks related to Russian supply, the resurgence of coal across Europe looks likely to persist.
INSIGHT: Shifting global investment in chemicals research is a challenge for established markets
LONDON (ICIS)–The chemical industry developed through the clever application of chemistry and technology and will continue to do so as companies adapt to meet the climate threat alongside the needs of growing market demand. In many ways it is back to basics, as climate and cost implications of well-established process routes are challenged in the shifting feedstock and energy environment. Companies also have to innovate around sustainable chemicals production and more sustainable and less hazardous materials: in some regions, the EU, for instance, pushed into doing so by increasingly tough regulation. But producers adapt spending to meet their needs and the balance between their own sustainability and growth. Demand for chemicals is forecast to continue to grow strongly in certain parts of the world while growth slows in others as markets change. Over many years, chemical industry investment in research and development has hovered at a relatively low level against sales for the majority, as the sector overall has become less technology- and more market-driven. Commodity chemicals growth and profitability, which has been relatively high for a number of years, taking into account the overall slump through the pandemic, has been an example of that, as low-cost feedstock and higher-growth-market opportunities have been grasped. In the 27-nation EU, base chemicals sales (including polymers, fibres and inorganics) accounted for 58% of the total in 2020. But in a more greenhouse gas avoidance, and abatement, and a more circular market situation that is having to change. Companies are having to innovate around feedstock and energy changes, the drive towards utilising renewable power, and distinct pressure from brands and other consumers for more climate-friendly products. These trends mean that sector companies will have to invest even more in research and innovation than in the past, just as they are expected to have to invest heavily to adopt new process technologies and to further curb greenhouse gas emissions. In the EU and elsewhere pressure is building for companies to innovate much more smartly around the climate challenge. The EU trade group Cefic’s mid-century vision, released a few years ago, called sector players ‘molecule managers’ for the capabilities they have to address the multiple, largely climate and chemical safety-led challenges of the coming decades. The sector invested about €10bn in research and development in 2017, Cefic said at the time, including on greater energy efficiency and on reducing its carbon footprint. The research and innovation challenge for companies operating in Europe is to invest adequately to meet the demands EU’s Fit for ’55 and Green Deal goals, alongside the traditional approach to matching customer ambitions and demand. This now has to involve making further advances in the digitisation of research and consequently in research efficiency. Clearly, companies need to know where they are heading as the sector landscape shifts, new opportunities arise and certain process routes and chemicals head for the sunset. Companies have to address the transition towards climate neutrality, greater circularity and, in the EU, implementing the EUs chemical strategy for sustainability. Cefic set up a Future Chemistry Network last year with “a mission mission to accelerate chemical innovations which are Safe and Sustainable-by-Design”. The allocation of spending to face the developing innovation challenge will be closely watched, as well as fought over at the national and EU level. A problem that the EU sector faces, however, is that its influence in the global industry is waning fast. This suggests that the fight for research and innovation funding at the corporate and possibly the national and EU level will be that much tougher in future. The latest data from Cefic suggests that the EU’s share of growing global chemicals sales will shift from 14.4% in 2020 to 10.5% in 2030. Global chemicals sales growth over that time is forecast to be 77%, from €3.5 trillion in 2020 to €6.2 trillion in 2030. Not surprisingly, therefore, the EU’s share of total global chemicals R&I investment looks as though it will drop sharply. China’s investment in chemicals R&I more than tripled in the 2010 to 2020 period as the sector developed rapidly alongside the country’s manufacturing economy and growing domestic demand. The rate of growth may change but the trajectory is clear. If we can equate smart chemicals growth with research and innovation, then the EU, and the US and Japan, have a job on their hands attracting the necessary investment to help the sector and its companies adapt to society’s changing chemicals needs. Insight by Nigel Davis
Indonesia Dec exports up 35%; coal-shipment ban to hit Jan growth
SINGAPORE (ICIS)–Indonesia’s total exports in December increased by 35.3% year on year, bringing the full-year 2021 average increase at 41.9%, with the country’s recent ban on coal shipments likely to weigh on 2022 growth. Exports in December totaled $22.4bn, while imports stood at $21.4bn, up 10.5% year on year, official data showed on Monday. China, the US and Japan, together, accounted for $9.4bn or 44.3% of Indonesia’s exports for the month, while ASEAN's share was $3.9bn or about 18%. Full-year 2021 exports were at $231.5bn. “Both exports and imports maintained their strong y/y [year-on-year] growth in December, but exports contracted sequentially,” said Sung Eun Jung, economist at research firm Oxford Economics, in a note. December exports slipped 2.0% from the previous month, resulting in the narrowing of the trade surplus to $1.0bn from the peak of $5.7bn in October. “Exports benefited from elevated commodity prices but fell short of expectations. Meanwhile, imports accelerated well past forecast as the Indonesian economy gradually reopens after mobility curbs were partially relaxed,” ING Think senior economist Nicholas Mapa said in a note. Indonesia’s decision to ban coal shipments temporarily in January is expected to weigh on export growth. The country, which is the world’s largest exporter of thermal coal, moved to curb shipments amid low supplies and concerns over power disruption. “We expect the near-term coal export ban and the anticipated decline in coal prices from their Q4 2021 peak to lead to a sharp slowdown in export growth this year,” Oxford Economics’ Sung said. “Meanwhile, recovering domestic demand will support imports and GDP growth, especially in H2 2022,” the Oxford economist added. ING Think expects southeast Asia’s biggest economy to continue its gradual re-opening, which will mean sustained import growth next year. “Should the trend of surging imports and disappointing export growth continue, we can expect the trade balance to dip below the highs noted last year,” Mapa of ING Think said. “A fading trade surplus suggests that support for the IDR [Indonesian rupiah] may wane in 2022, with the currency likely coming under pressure as the Fed readies its projected rate hike cycle,” Mapa added. Focus article by Pearl Bantillo ($1 = Rp14,322)
India’s Reliance to invest $80bn in green energy projects
MUMBAI (ICIS)–India’s petrochemical major Reliance Industries Ltd (RIL) plans to invest Indian rupees (Rs) 5.95tr ($80bn) in green energy and other projects in western Gujarat state as it aims to achieve its net zero carbon emissions target by 2035. This investment would involve the setting up of a 100-gigawatt (GW) renewable energy power plant over the next 10-15 years at a cost of Rs5tr, RIL said in a statement on 13 January. “RIL has started the process of scouting land for the power project in Kutch, Banaskantha and Dholera. The company has requested for land in Kutch,” it said. The company will also set up plants to manufacture solar photovoltaic (PV) modules, energy-storage batteries and fuel cells at a cost of around Rs600bn. RIL will invest a further Rs250bn in existing projects and new ventures over the next five years, it said. To ensure a wider reach for its green energy initiative, the company plans to develop an ecosystem to assist small and medium enterprises (SMEs) and encourage entrepreneurs to embrace technologies and innovations in renewable energy and green hydrogen, RIL added. In June 2021, RIL chairman Mukesh Ambani had announced that the company would aim for net zero carbon emissions by 2035. ($1 = Rs 74.18)
Singapore's petrochemical exports rise by 28.4%, NODX up 18.4%
SINGAPORE (ICIS)–Singapore's petrochemical exports rose by 28.4% year on year to Singapore dollar (S$) 1.6bn in December, supporting the overall rise in non-oil domestic exports (NODX) abroad, official data showed on Monday. Singapore's petrochemical exports to China rose by 18.9% year on year in December while those to Indonesia surged by 80.1%, Enterprise Singapore said in a statement. Overall NODX rose by 18.4% year on year in December, decelerating from the 24.2% expansion in November. Non-electronic NODX, which includes petrochemicals and pharmaceuticals, rose by 19.9% year on year in December, slowing from the 22.6% expansion in November. Non-electronic NODX to eight out of Singapore's top 10 markets rose in December while those to South Korea and the US dropped.
BLOG: Why China’s PP demand may only grow by 1% per year in 2022-2032
SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Being part of a crowd can feel great as we are very social animals. But big crowds don't always head in the right direction. One big crowd (conventional thinking) accepts that China's real estate deflation matters to petrochemicals growth. But the crowd believes it is not a significant deal because existing demand is already so big that even low percentage increases will deliver lots more consumption. BUT, as we discuss in today's post: It is going to be difficult to generate big growth because the property engine was so important for demand and because much of the rest of China – outside where the property bubble took place – is older. Older populations buy less things. China is also grappling with the overall challenge of a rapidly ageing population. China would be very happy with very low levels of petrochemicals growth because it wants to hit its international carbon reduction agreements – and because it wants to make further big strides in cleaning up the local air, water and soil. China intends to reduce the overall commodity intensity of its GDP for environmental, debt and demographic reasons. An economically strong China (we think China will remain economically strong) doesn't necessarily equal strong petrochemicals growth. China will succeed because of a new growth model built on sustainability. And remember that when China wants to do something, it very often gets it done. 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.
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