BLOG: Five personal predictions for chemicals markets in 2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson: It is that time of the year again when analysts need to put their reputations on the line and make forecasts for the following year.

So, see below five forecasts for 2025 with detailed descriptions as follows:

There will be enough new capacity coming onstream next year to push China closer to self-sufficiency in some chemicals and polymers such as polypropylene (PP). The boat has already sailed on products such as purified terephthalic acid (PTA) and styrene where China has, in recent years, swung into net export positions. What will further bolster China’s self-sufficiency will be China’s long-term decline in demand growth. China’s operating rates will be higher than sometimes assumed, as it will prioritize self-sufficiency, and potentially more exports (see point 3) over individual plant economics.

We are seeing a long-term shift in global growth momentum to the much more populous and much more youthful mega region of the Developing World ex-China. Part of this process involves relocation of manufacturing capacity from China to countries such as Turkey, Mexico, Vietnam and India for cost and geopolitical reasons, and this will continue in 2025. Deals will be done by the Trump administration on tariffs as competitively priced imports will have to come from somewhere – and because of the intricate and complex integration of manufacturing supply chains.

Since 2021 and the Evergrande Turning Point, China had doubled down on exports up and down manufacturing chains, reducing the room for competitors in low, medium and high-value industries. This includes its switch to net export positions in products such as PTA and styrene, and the potential for this to happen in products such as PP,  acrylonitrile butadiene styrene (ABS) and polycarbonate (PC). I, therefore, believe that antidumping, tariff and other protectionist measures against China will accelerate in 2025. China will respond in kind.

First came the pandemic-related disruptions to global container shipping and, since February of this year, we’ve had to contend with the Houthi attacks on shipping that have disrupted access to the Suez Canal via the Red Sea. Access to cost-efficient and prompt logistics will remain a key competitive advantage in 2025 for chemicals companies as global trade flows will remain disrupted for whatever reasons.

The ICIS numbers tell us that because of disappointing Chinese demand, and the scale of global capacity closures required to bring markets back into balance, a new upcycle in 2025 is a very remote possibility. Expect no upswing for at least the next three years because of the scale of the shutdowns necessary.

I could be wrong, of course. I’ve been advised not to keep saying this, but I disagree as nobody likes somebody who never concedes when they are wrong, moves on from the history of where and when they have been wrong, and assumes that they will always be right in the future.

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.