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
China, demographics, debt and polymers demand
China’s polymers consumption in 2022 107m tonnes from a population of 1.4bn. The developing world ex-China’s consumption was at 84m tonnes from a population of 5.3bn. And the developed world consumed 82m from 1.1bn people.
Why China could become self-sufficient in HDPE
CHINA’S NET IMPORTS of HDPE could be either 126m tonnes in 2023-2040, 38m tonnes or as low as 7m tonnes
China’s LLDPE and LDPE markets see overstocking on unfounded recovery hopes
China’s LLDPE imports in February this year reached their highest level for that month on record – 499,168 tonnes.
This seems likely to have been overstocking on anticipation of the post zero-COVID bounce back that hasn’t happened, as imports in March April fell month-on-month by 6% and 7% respectively. January-April 2023 exports also reached 64,678 tonnes – 96% higher than last year.
China’s PP demand in 2023 heading for a 1% decline on risk of just 2.5% GDP growth
A FALL IN China’s PP imports in April and low operating rates at some China plants suggest 2023 demand growth at minus 1%
The old China and HDPE, the new China and the future of demand
In my downside scenario for China’s HDPE demand in 2023-2040 is correct, the country’s total consumption during this period would be 134m tonnes lower than the ICIS Base Case.
Beware of the “head fake” of an improving China and better Q2-Q4 chemicals financial results
YEAR-ON-YEAR chemical company financial results could we improve in Q2-Q4 2023; But this should not be seen as a return to the Old Normal.
China HDPE demand set for 3% decline this year with, perhaps, overstocking supporting the other grades
CHINA’S POLYETHYLENE (PE) market has performed in a very mixed fashion so far in 2023, as the above chart tells us.
The annualised January-March 2023 data suggest a 3% fall in high-density PE (HDPE) full-year demand over 2022, a 3% in increase in low-density PE (LDPE) demand and a 4% increase in linear-low density PE (LLDPE) consumption.
China’s one-off PE demand boom and why consumption could now shrink
The ICIS Base Case is already very conservative, assuming an annual average China PE demsnd growth of just 2% per year between 2023 and 2025 compared with 11% in 2000-2022. But I see average growth of only 1% or even minus 2% as perfectly possible.
Decarbonisation, the timing of the end of this downcycle and building future growth
BECAUSE the old certainties of strong demand growth in China and elsewhere are over, sustainability must be at the core of new petrochemicals growth models.