THE THREE EVENTS described are historic, meaning that the tremendous volume growth that the petrochemicals business has seen since 1992 could be largely over.
The focus therefore needs to switch to growing value
Asian Chemical Connections
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
Why China’s HDPE net imports could average just 700,000 tonnes per year in 2024-2030
RIGOROUS scenario planning is essential for China’s net import flows in 2024-2030
Record levels of oversupply and the “Doublespeak” of the old market language
China CFR PE price spreads hit new record low in 2024
CFR China PE spreads hit a new record low because of all-time high oversupply
So far in 2024, despite supply tighter than it was in December last year, the average per tonne CFR China PE price spread over CFR Japan naphtha costs has fallen to its lowest annual level since we began our price assessments way back in 1993. 2022 and 2023 were the previous record lows.
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.
The scale of plans to turn oil into petrochemicals may radically reshape this industry
A petrochemicals world dominated by Supermajors, especially those running COTC plants, or one where greater regional cooperation (more on this in later posts) and increased protectionism allow older, smaller and less carbon efficient plants to survive.
The “National Champions” in the New Petrochemicals Landscape
SHORT-TERM tactics should involve maximising returns within regions along with a greater focus on exports anywhere in the world
Jump to page: