Every tonne of polymer you decide not to produce because there isn’t a viable market will save vital revenues – especially as feedstock costs will remain very volatile. Every tonne of polymer you do produce because the market works will earn you crucial money at a time of declining overall sales.
Asian Chemical Connections
Global PE and PP indexes Week Two: Asian prices recover as Europe declines continue
THESE ARE STILL extraordinary times in global polyolefins markets. Although the great equalisation has begun as pricing in most of the rest of the world falls towards Chinese levels, price premiums over China remain historically very high. There are thus still strong opportunities for exporters to make good netbacks in markets other than China.
European PE and PP producers face re-globalisation risks
Northwest Europe PP price premiums over China averaged $161/tonne between November 2002 and December 2020. Between January 2021 and 16 September 2022, price premiums averaged $749/tonne. What would be the consequences for European PP pricing and profitability if price premiums returned much closer to their long-term averages?
If you think this is a typical chemicals downcycle, think again
THERE IS A FEELING out there that the chemicals and polymers industry is undergoing a typical downcycle that will last a few years, followed by yet another spectacular fly-up in margins. But I believe a great deal more is happening beyond the usual cycles of over-building followed by under-building.
The rules of the chemicals game are changing as companies pay the penalty for “growth for growth’s sake”
Because companies in all manufacturing and service sectors haven’t been adequately charged for the natural resources they use, and the damage they cause to the environment, we face the risks of catastrophic climate change and more plastic in the oceans than fish.
Global chemicals: What I believe our industry must do in response to a deep and complex crisis
I WORRY that we face a crisis deeper and more complex than any of us have seen before because of the confluence of geopolitics, demographics, the changing nature of the Chinese economy as Common Prosperity reforms accelerate, China’s rising chemicals and polymers self-sufficiency, the high levels of global inflation with all its causes, and, last but certainly not least, climate change.
Chemicals companies face an unprecedented demand and supply crisis
THE GLOBAL CHEMICALS industry is, I believe, facing a demand and supply crisis on a scale and on a level of complexity that nobody has experienced before. This is a huge subjects requiring a series of posts. Let me start by looking at China’s role in this crisis. In later posts.
Polyolefins pricing data suggest China still hasn’t recovered
Comparative PE and PP pricing data between Vietnam and southeast asia – and the “spreads” numbers between China PE and PP prices and naphtha costs – suggest the China economy has yet to recover.
Food crisis in 2023 may represent major threat to developing-world polymers demand
High-density polyethylene (HDPE) demand in the developing world in 2023 could contract by 300,000 tonnes, rather than, as in our base case, grow by 800,000 tonnes because of the food crisis.
Assuming all the other regions grew as under our base case, global growth would be 2% in 2023 rather than our base case of 4%.
China’s post-lockdown economic rebound has yet to happen, according to the ICIS spreads data
At some point, polyolefins exporters to China and the local producers will regain pricing power. This will become apparent from a widening of spreads as economic activity returns to normal. It really is as simple as this. So, you need our data and analysis.