BLOG: The first of three things you should do during the rest of this downturn

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

At first glance, the latest ICIS ethylene operating rate forecast is alarming. Even by 2035, global operating rates could still be below their long-term average—potentially marking a 14-year downturn since the Evergrande Turning Point in late 2021.

But here’s the good news: This is a live situation, and industry adaptation is inevitable. The future is not set in stone—it will be shaped by the decisions we make today.

The Data Speaks
• ICIS base case projections show an average 6.3 million tonnes per year of new capacity.
• However, by reducing this to 2.5 million tonnes per year, operating rates could return to 87%—the long-term norm.
• The question is: When and how will the market rebalance?

Plant Closures, Project Delays & Cancellations: The Unknowns
Balancing the market means making difficult decisions, but shutdowns and project delays are far from straightforward:
• Timing uncertainty – Could the upturn come sooner than expected?
• High exit costs – Environmental clean-up and pension liabilities complicate shutdowns.
• China’s role – Ageing plants, coal-based capacity, refinery feedstock limits, and regulatory shifts could drive rationalisation, but when and to what extent?
• Government intervention – Will policy sustain industries in Europe & South Korea, or will we see major consolidations?

Your Three-Point Plan for Success
1. Update the data every six months – Ethylene is just the start. Conduct the same detailed analysis for every product, country, and region.
2. Stay ahead of trade policy – As global trade tensions rise, import tariffs will shift market dynamics. Companies that act early will gain an advantage.
3. Leverage AI & analytics – Cost savings and efficiencies from AI-driven tools like Ask ICIS are already transforming decision-making.

What This Means for You
Yes, the downturn is severe, but opportunities remain. A data-driven approach will enable your business to adapt, optimise, and position itself for the recovery. Are you ready?

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.