A full recovery next year? If you think this is likely, then think again
Asian Chemical Connections
Stop wasting time waiting for the end of the downcycle
THE TEN REASONS why this isn’t a standard chemical industry downcycle
Don’t put sustainability in a broom cupboard in the basement
How the chemicals world could re-align as sustainability becomes a new route to competitive advantage
China events suggest no global petchems recovery until 2026
Capacity growth of just 1.6m tonnes a year versus our base case of 5m tonnes a year would require substantial capacity closures in some regions. Closures are never easy and so take considerable time because of links with upstream refineries, environmental clean-up and redundancy costs – and the reluctance to be the “first plant out” in case markets suddenly recover.
China PP exports could reach 2.6m tonnes in 2024 as markets become ever-more complex
As recently as 2020, China’s PP exports for the whole year were just 424,746 tonnes. Between 2021 and 2023 they ranged between 1.3m to 1.4m tonnes. If the January-May 2024 export momentum were to continue for the rest of this year, full-year 2024 exports would reach 2.6m tonnes, double last year’s level.
A Personal View of the New Petrochemicals World
What follows is, as always on the blog, a personal view of how I see the petrochemicals world developing. There are no right answers, and the debate is the thing. That’s how we move forward together.
Global PE demand in 2024 could have been 74m tonnes lower if incomes and population drove the market
If population and incomes drove growth, global PE demand could have been just 52m tonne in 2024 versus the ICIS forecast of 126m tonnes. The China market could have been just 10m tonnes versus 43m tonnes; the Developing World ex-China 13m tonnes versus 44m tonnes and the Developed World 29m tonnes versus 38m tonnes.
China’s average annual LLDPE net imports could be just 300,000 tonnes in 2024-2030
CHINA’S net LLDPE imports could average 6.5m tonnes a year of just 300,000 tonnes in 2024-2030
Global ethylene capacity growth would need to be 90% lower than the ICIS base case for healthy 2024-2030 operating rates
The blue line in the above chart involves annual average capacity growing at just 800,000 tonnes/year in each of the years between 2024 and 2030. This is versus our base case assumption of 7m tonnes/year of capacity growth during each of the years.
China’s 2023-2030 polyolefins demand growth and the new mood music
I think that China’s polyethylene (PE) demand growth averaged 2% across the three grades in 2023. I see this year’s growth at between 1-3%, and at the same levels up until 2030.
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