EPCA ’19: Chemicals faces end of ‘business as usual’ – consultant

BARCELONA (ICIS)–Big paradigm shifts in key markets such as automotive and polymers mean the chemicals industry has to move on from a “business as usual” strategy, according to a chemicals consultant.

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The automotive sector is suffering from a short-term downturn driven by lower economic growth plus longer-term trends which will transform the sector.

This new trends will have big implications for chemicals demand, according to Paul Hodges, chairman of International eChems.

This will be one of the topics chemicals players will be discussing at the European Petrochemicals Association (EPCA) annual meeting.

He said the shift to electric vehicles will accelerate because a tipping point has been reached where battery costs have fallen so far that it is now more cost-effective in the premium sector to buy an electric vehicle than a conventional one.

There are only around 20 parts in an electric vehicle drive train, compared with 2,000 for a conventional engine. While this creates opportunities for chemicals companies, some automotive chemicals markets are set to disappear, said Hodges.

POLYMER SHIFT
In polymers, single-use plastic bans and the shift towards circular economy are driving structurally lower demand amid big hikes in capacity.

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The EPCA annual meeting runs in Berlin on 6-9 October.