BLOG: Latest China PP data: The old Supercycle world retreats further into the past

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

Here are my three scenarios for China’s long-term chemicals and polymers demand growth with percentage weighting – i.e. how likely I view each of the scenarios.

1. China chemicals demand grows is in the low single digits – 40%:
2. Demand growth turns negative – 55%:
3. The market returns to previous levels of growth – 5%.

And I am becoming more convinced that we are entering a period of declining global chemicals growth as well as in China.

It is what it is. This is what the demographics, debt, climate change and geopolitical factors seem to be telling us.

This direction of travels appears to be supported by the latest China polypropylene ((PP) data.

The 1992-2021 Petrochemicals Supercycle is receding further into the past.

Saudi Arabia on a year-on-year basis saw its China PP sales turnover in China fall by an estimated $85m in January-June 2024. This followed $168m tonnes lower turnover in 2023 versus 2022.

South Korea’s January-June 2024 turnover fell by $35m following a $377 decline in 2023 versus 2022.

Meanwhile, China’s PP exports are in line to reach 2.5m tonnes in 2024, up from 1.3m tonnes in 2023.

Companies need to respond to these secular and long-term shifts in markets by deciding whether they can continue to compete in commodity chemicals.

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.