Petrochemical markets are likely to remain depressed while China and other countries continue to add significant capacity, unless big wave of closures and demand improvement help to achieve balance.

- Global capacity additions far outstrip demand growth

- China, Middle East, US likely to continue expansions

- China drove the petrochemical supercycle, but no longer

- China chemicals demand growth likely only 2-4%/year

- Prospect of global deflation

- Europe can focus on specialty chemicals, other niches

SINGAPORE (ICIS)--ICIS has revised down its forecast for China’s combined imports of propane and butane for 2024 because of weaker-than-expected demand in fuel applications.

• Full-year LPG imports projected at 36.7 million tonnes
• Fuel LPG demand falls on increased natural gas usage amid weak economy
• Strong feedstock LPG demand partly offset decline in fuel consumption

Europe’s beleaguered petrochemical industry could see its fortunes improve dramatically if Mario Draghi’s new industrial policy proposals are adopted, along with a fair regulatory framework.

- New industrial strategy can rescue region from structurally higher costs, low levels of investment

- Historic moment with momentum building for new approach to Europe industry transformation

- Green Deal objectives need to work alongside measures to improve competitiveness

- New requirements for Environmental, Social and Governance (ESG) reporting and Extended Producer Responsibility (EPR) will have big impact on chemicals

- Compliance teams face a “nasty cocktail” because of lack of regulatory clarity

- Shift from risk to hazard-based approach

- Regulations create opportunities for innovative chemical companies