Flat 2023-2050 demand growth in China and the developed world would leave the global market for nine synthetic resins 1bn tonnes smaller than the ICIS base case.
Asian Chemical Connections
Why China’s HDPE demand could decline in 2023-2040
China’s cumulative HDPE demand under the downside scenario would be 97m tonnes lower than our base case. in the above chart
How to manage risks and opportunities during maybe the worst-ever PP downcycle
During this downturn, razor-like focus on fluctuating netbacks and supply and demand among all the different countries and regions will allow producers to ensure that they don’t make product for markets where there is no demand, while ensuring that they take maximum advantage of many brief periods of stronger demand and pricing.
Global oversupply of petrochemicals to hit 218m tonnes in 2023 – the highest in any other year since 1990
Capacity exceeding demand is forecast to reach 218m tonnes this year from a 1990-2022 annual average of 76m tonnes.
Why China’s 1990-2022 PP consumption could have been 300m tonnes lower without the benefit of “one off” historical trends
IF China had been a typical developing economy, as the above chart illustrates, its cumulative 1990-2022 could have been 300m tonnes smaller. As history moves forward,this suggests that China’s long-term demand growth could turn negative
Diversification to other markets in 2023 crucial for PP producers because of China risks
China could be net exporter of 900,000 tonnes of PP this year, down from 2022 net imports of 3.2m tonnes This makes the other import markets more important for producers.
A flood of PP no matter how what the 2023-2025 demand growth
EVEN if China’s PP demand growth is 14% this year – double our forecast – and growth in other regions is higher than we expect:
Global capacity in excess of demand would be 18m tonnes in 2023 compared with a 8m tonne/year average in 2000-2022,
Cracker project announcements continue despite all-time high oversupply
Companies behind the crackers due on-stream over the next four years emphasise the low-carbon output. The planned new plant also have excellent economies of scale
China’s long-term GDP growth risks and polymers demand
Cumulative downside demand in the above chart would total 5bn – 91m tonnes lower than our base case.
China chemicals growth and the 20th Communist Party Congress
China’s share of global demand growth in the seven big resins jumped to an astonishing 67% in 2002-2021. Northeast Asia ex-China’s share of demand fell to minus 1% with Europe and North America worth just 4% and 2% of growth respectively. The chemicals world had become dangerously lopsided.
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