BLOG: China vs the rest of developing world: The great re-ordering of polymers demand

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: Turkey, the subject of today’s post, is booming.  So are Vietnam, Mexico, India, Brazil and Indonesia as the Developing World ex-China region gradually (gradually being the operative word) takes over from China as the No 1 global chemicals and polymers demand driver in volume terms.

So, today’s post launches a new series of posts that will take a deep dive into the Developing World ex-China mega region.

But please do not get carried away in thinking that developing countries outside China will bring the global chemicals industry back into healthy balance anytime soon. During meetings at this year’s EPCA, senior executives forecast that the recovery would take anywhere between another three-to-nine-years.

Also bear in mind that even when markets do come back into better balance, we will never entirely return to conditions during the 1992-2021 Chemicals Supercycle because of long-term economic problems in China, increasing global trade tensions, climate change and sustainability pressures.

But volatility and change always create opportunities. A major aspect of increasing global trade tensions is of course China’s split with the West. This is one of the reasons why I believe we will see chemicals demand growth in countries such as Turkey being above consensus expectations.

Turkey has long been the manufacturing outsourcing destination of choice for the EU.

Plus, of course, there’s Turkey’s great strategic location. The country acts as a bridge between Europe, the Middle East, North Africa, and Central Asia, offering exporters access to all these different markets, some of which are booming.

Demographics, at least for the next 20 years or so, are still on Turkey’s side as it remains a youthful country

Then there are the growing trade tensions with China. But the reality is that the West will still have to do business with China in the many manufacturing value chains where it is dominant such as electric vehicles and solar panels.

The “window dressing” of appearing to take reshoring seriously will be to increasingly do business through third-party countries such as Turkey, Mexico and Vietnam. This process is already well underway.

It seems probable that more and more Chinese investment will move to these third-party countries to get around higher import tariffs and antidumping duties etc, a case in point being BYD’s plans to build a factory in Turkey.

There will many opportunities, some temporary and some permanent, as the Developing World ex-China in general overtakes China as the No1 driver of global polymers demand.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.