BLOG: This is the first significant chemical downcycle in many years

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

The polyolefin industry has been so, so lucky, because every other downturn over the past 25 years has been brief and moderate. Not this time, though

But, with the right data and analysis (see sample slides in today’s article), polyethylene (PE) and polypropylene (PP) producers can successfully cross all the zigzag lines of mini-ups. and price declines as we head down this circuit.

What is needed is an integrated holistic approach to netback, demand and supply analysis to take advantage of opportunities such as:

  • North West Europe, South East Asia, Vietnam, Turkey, India and Pakistan have price premiums on high density PE (HDPE) films compared to China which is still averaged $163/tonne in September this year despite recent declines.
  • Net imports of HDPE in all grades are expected to reach 4.6 million tonnes in 2022 in Europe, Turkey, some Southeast Asian countries, India and Pakistan. This compares to around 5.6 million tonnes of net imports from China in 2022.
  • Northwest Europe, Southeast Asia, Vietnam, Turkey, India and Pakistan Injection grade PP premiums that still averaged $154/tonne compared to China in September – again despite recent declines.
  • Net imports of PP for all grades are expected to reach 6.9 million tonnes in 2022 in Europe, Turkey, some Southeast Asian countries, India and Pakistan. This compares to around 2.5 million tonnes of net imports from China in 2022.

Despite the magnitude of today’s challenges, you can emerge a winner.

Editor’s Note: This blog post is an opinion piece. The opinions expressed are those of the author and do not necessarily represent those of CIHI.

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