UNTIL or unless margins and spreads return to normal, there will have been no China recovery
Asian Chemical Connections
China’s demographic crisis: Implications for polymers demand
The light blue bars show the impact of a Dire Demographics scenario on China’s polymers demand
Stop wasting time waiting for the end of the downcycle
THE TEN REASONS why this isn’t a standard chemical industry downcycle
The US is winning in China in today’s HDPE world but what about tomorrow?
THE US is winning in the key China market because of feedstock advantages in a lower-price environment. But future trade flows will likely be shaped by geopolitics, demographics, debts and sustainability
Global HDPE, the value of facts over commentary and the importance of scenario planning
Global HDPE capacity would have to grow by just 173,000 tonnes a year versus our base case assumption of 2.6m tonnes a year to achieve a 2024-2030 operating rate of 88%.
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.
China’s Third Plenum later this month: Implications for petchem markets
How will we know if the Third Plenum has returned China to its old growth trajectory? If China CFR HDPE price spreads over CFR Japan naphtha costs rebound by 164%, LDPE spreads increase by 62% and LLDPE spreads rise by 100%.
China’s ever-more sophisticated chemicals market could entirely serve itself
What’s your Plan B if China were to also become self-sufficient in specialities as well as commodities?
China could still become entirely petrochemicals self-sufficient despite the impact of EVs on its refineries
Petrochemical exporters to China need to ignore suggestions that lack of feedstocks will slow China’s push to complete petrochemicals self-sufficiency
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