Trump versus Xi fuels growing uncertainty across global petrochemical supply chains

10 April 2017


Scenario StudyLondon, ICIS - The Trump administration is struggling to find a consistent policy direction and it is unclear what is going to happen next. Take last week’s summit between President Trump and President Xi Jinping of China. Ahead of the meeting came bellicose language from the US side about being tough towards China on trade, but the summit itself failed to live up to the tone of President Trump’s Tweets. This indicates that anti and pro-free trade forces within the White House continue to compete for influence. Meanwhile, China, like everyone else, has to try to second-guess the US as it confronts major domestic social, political and economic challenges.

In response to the current uncertainty, leading petrochemicals market intelligence provider ICIS, in partnership with consultancy International eChem, has launched the first in a series of quarterly reports to assist petrochemical companies and their investors as they navigate the challenges and opportunities created by global instability.

Report co-author, John Richardson of ICIS says: “Our aim with this quarterly report series is two-fold. To provide a clear understanding of the tectonic shifts now underway in the world’s two largest economies – and to offer a detailed road map outlining the potential impact of these developments on business and investments.”

The petrochemicals industry must brace itself for significant and far-reaching effects. If President Trump remains in office for the next eight years, and President Xi’s term is extended for a further five years at the October Communist Party Congress, the decisions made now will have long-lasting effects on the medium and longer-term outlook. Now is the time to begin preparations ahead of the major disruption that clearly lies ahead for supply chains.

This initial report in the Uncertainty Study series is entitled ‘War of Words’ and is co-authored with Paul Hodges of International eChem. The core of the report is a detailed analysis of the four critical value chains – ethylene, propylene, benzene, paraxylene (PX) – commonly seen as the ‘building blocks’ of the entire petrochemicals and plastics industry.

Subscribers will benefit from an analysis of the inter-regional moves that currently dominate trade between the US and China, along with the key risks and implications for producers, consumers, traders and investors in the major regions. The likely impact of President Trump’s various new policies, as well as China’s retreat from stimulus are examined in detail. Other key questions addressed include how the East West relationship may change as well as the subsequent impact on the global landscape.

“It seems most unlikely that the globalisation model of recent decades – whereby raw materials are routinely shipped half-way around the world, and then returned as finished product – will survive for much longer.” says Paul Hodges.

Clearly the ‘business as usual’ scenario is the least likely outcome for the years ahead. This latest study from ICIS and International eChem gives petrochemical leadership teams the insight and analysis needed to better prepare for an inevitable change to the industry status quo.

Find out more about the Study »

About the authors

Paul HodgesLead Author Paul Hodges (IeC) is a trusted adviser to major chemical companies and the investment community. He has worked in the chemical industry for 30 years. Initially he spent 17 years as a senior executive with one of the world’s leading companies (ICI), both in the UK and the USA, where he held senior executive positions in petrochemicals and chloralkali, and was Executive Director of a $1 billion ICI business. He founded IeC in 1995, has strong professional relationships with the leading players, and follows developments on a detailed day-to-day basis. He is the co-author of Boom, Gloom and the New Normal: How the Ageing Western BabyBoomers are Changing Demand Patterns, Again (, and has been recognised in the Financial Times and elsewhere for his success in correctly forewarning of the global financial crisis. Paul is an invited member of the World Economic Forum’s Global Agenda Council on the Future of Chemicals, Advanced Materials & Biotechnology 2014-2016, a Member of the Energy Institute, and a Freeman of the City of London. He is a graduate of the University of York, and studied with the IMD business school in Switzerland.

John RichardsonLead Author John Richardson (ICIS) is a highly experienced chemicals consultant and trainer, who has been working in the industry for 19 years. Based in Asia-Pacific, John has deep knowledge of the companies and people who have transformed the region into the world’s major production and consumption region. His aim is to provide insightful, fact-based consultancy analysis of the key issues facing the industry. His views are highly valued by senior executives, who appreciate his balanced and independent approach. From 2006 until 2013, John was Director - Asia of ICIS training, in which role he successfully launched the ICIS training business in Asia. This provides a wide range of courses covering petrochemicals, oil refining, fertilizers and base oils. He now works for the ICIS consulting team, with responsibility for the Asian Polyethylene and Polypropylene Price Forecast Reports. John has also co-authored an e-book, Boom, Gloom and the New Normal: How the Ageing Western BabyBoomers are Changing Demand Patterns, Again. The book, which has been published by ICIS, examines how demographic factors and events in financial markets have reshaped the global economy. His Asian Chemical Connections blog has a wide regional and global readership.

About ICIS

ICIS Logo ICIS is an independent price reporting agency focusing on global energy, petrochemical and fertilizer markets. Our aim is to give companies in global commodities markets a competitive advantage by delivering trusted pricing data, high-value news, analysis and independent consulting, enabling our customers to make better-informed trading and planning decisions. We have more than 30 years' experience in providing pricing information, news, analysis and consulting to buyers, sellers and analysts.

With a global staff of more than 800, ICIS has employees based in Houston, Washington, New York, London, Montpellier, Dusseldorf, Karlsruhe, Milan, Mumbai, Singapore, Guangzhou, Beijing, Shanghai, Yantai, Tokyo and Perth. Some 350 of ICIS’s staff are journalists engaged in reporting market prices and news, and ICIS is fully committed to upholding the highest journalistic principles of verification, corroboration and authentication. ICIS has a compliance framework that along with its methodologies and business processes adheres to the requirements of the IOSCO PRA Principles.

ICIS is a division of Reed Business Information, part of RELX Group.

About International eChem

International eChemWe are trusted commercial advisers to the global chemical industry and its investment community. Our team has an in-depth understanding of the issues, and of the ‘real world’ in which clients operate, due to our experience in working with many of the world’s major companies and financial institutions.

About Reed Business Information

Reed Business Information provides information, analytics and data to business professionals worldwide. Our strong global products and services hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of RELX Group plc, a global provider of information and analytics for professional customers across industries.

About RELX Group

RELX Group plc is a global provider of information and analytics for professional and business customers across industries. The Group serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 30,000 people of whom almost half are in North America. RELX PLC is a London listed holding company which owns 52.9% of RELX Group. RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. The total market capitalisation is approximately £31.2bn/ €36.5bn/ $38.8bn.

New Study helps you navigate rising uncertainty

It’s not possible to know exactly what will happen next, but what decision-makers can do is plan for major change and prepare for likely outcomes in the short- and long-term.

The first in a series of four detailed reports, ‘War of Words’ focuses on the key critical developments in the relationship between China and the US and how future trade and business policies are likely to impact the petrochemical markets globally and disrupt the ‘business as usual’ scenario.

Find out more »

Complementing Services

Supply and Demand Database

The ICIs-IeC reports are underpinned by data from this ICIS analytics platform. Access to this online database enables you to fully gain an end-to-end perspective across the global petrochemicals supply chain and make better sense of the potential future scenario.

Data includes import and export volumes, consumptions, plant capacities, production, and product trade flows – from 1978 up to 2030 – by product, country and region.

Find out more »


Our team of consultants deliver tailored solutions based on your unique requirements – from research and due diligence, to investment analysis and portfolio optimisation. In addition, we have a strong team of consultants based in China to deliver the insights you need to understand how local developments can impact the global petrochemical markets.

ICIS consultants integrate their solid industry experience with our wealth of database and extensive research, and work alongside your team to help meet your growth objectives.

Find out more »