Will Beacham
11-Nov-2022
Asia’s petrochemical markets were mixed amid economic headwinds and dampening consumption in China amid a slowing economy, with no let-up on its harsh zero COVID-19 policy, dampening consumption.
The situation is being exacerbated by high inflation, which is threatening to plunge major world economies into a recession.
For the acrylonitrile-butadiene-styrene (ABS) market, there were limited pillars of support as downstream demand is weak while feedstock benzene and styrene monomer (SM) prices have also softened.
Updated on 11 November 2022
On this topic page we analyse the impact of coronavirus and oil price dynamics on chemical markets and bring together the latest news reported by ICIS.
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LATEST HEADLINES (Last updated at 03:00 GMT on 11 November 2022)
US chem shares surge as broader market rises on positive inflation data
By Adam Yanelli 11-Nov-22 06:23 HOUSTON (ICIS)–US-listed shares of chemical companies surged on Thursday, largely outperforming the broader market which rose significantly on favourable economic data on inflation.The Dow Jones Industrial Average rose by 3.7%, while the Dow Jones US Chemicals Index rose by 4.95% and the S&P 500 Chemicals Industry Index rose by 5%.
Europe PET buyers lured by imports, but demand questionable
By Caroline Murray 11-Nov-22 01:58LONDON (ICIS)–The window of opportunity for polyethylene terephthalate (PET) importers appears wide due to Europe’s unique cost situation, but demand is so low that PET buyers are unsure how to proceed.
British industrial demand to remain below previous years
By ICIS Editorial 10-Nov-22 01:05 LONDON (ICIS)–Despite recent pressure to NBP Day-ahead and front month gas prices, a return to high levels of industrial offtake in Britain is unlikely, ICIS analysis shows. Normal industrial demand over the past five years has averaged 10mcm daily. However, since the rise of gas prices in Britain, industrial gas offtake has dropped to around 5.6mcm from January to November 2022.
EU, eurozone September chems prices decline modestly in split market
By Morgan Condon 10-Nov-22 01:30 LONDON (ICIS)–Chemical pricing in September was mixed for European producers, with some key manufacturing nations bucking the modest declines recorded in the eurozone and wider EU, according to the EU’s statistical agency, Eurostat.
The latest data from Eurostat indicates that Italy and Poland recorded single-figure gains compared with the previous month, supported by smaller gains in France and Germany.
Asia BDO retreats on poor demand, weak domestic China market
By Clive Ong 10-Nov-22 11:27 SINGAPORE (ICIS)–The Asian 1,4-butanediol (BDO) market trended lower as demand in the region dissipated amid a poor economic outlook. Some participants believe that demand in the region, in particular China, could remain weak until after the Lunar New Year in late January.
Asia petrochemical markets mixed amid high inflation
By Felicia Loo 09-Nov-22 14:28 SINGAPORE (ICIS)–Asia’s petrochemical markets were mixed amid economic headwinds and dampening consumption in China amid a slowing economy, with no let-up on its harsh zero COVID-19 policy, dampening consumption.
China, India ethanolamines markets under downward pressure as demand wanes
By Clive Ong 10-Nov-22 14:28 SINGAPORE (ICIS)–The ethanolamines markets in China and India remain under downward pressure amid prevailing weak demand and ample supply. Participants continue to expect weak markets in the near term as the global economic outlook remains uncertain.
China’s MEC demand disrupted by zero-COVID strategy
By Keven Zhang 09-Nov-22 11:41 SINGAPORE (ICIS)–China’s methylene chloride (MEC) prices saw steep falls in the past two weeks due to disruption to its domestic demand by the new round of lockdowns implemented to contain the COVID-19 spread in the country, although production cutbacks may provide some support in the near term.
INSIGHT: More pain for chemicals as US Federal Reserve has ‘a ways to go’ on rate hikes
By Joseph Chang 03-Nov-22 06:25 NEW YORK (ICIS)–US and global chemical producers will likely see more pain ahead as the US Federal Reserve still has a “ways to go” in its tightening cycle to bring inflation down to its 2% target. It’s not pausing or pivoting, and not budging from its target. The US equity market as measured by the S&P 500 fell 2.5% on 2 November on disappointment that the Fed gave no indication it will stop interest raising rates, other than acknowledging it has already tightened monetary policy significantly. The Fed hiked its benchmark rate by 0.75 percentage points – its third consecutive hike of that magnitude – to a range of 3.75-4.00%. “Our message is clear – we think we have a ways to go. We have some ground to cover with interest rates before we get to that level… we think is sufficiently restrictive,” said Fed chair Jerome Powell at the Federal Open Market Committee (FOMC) press conference.
INSIGHT: Asia October PMIs point to broadening export downturn
By Nurluqman Suratman 02-Nov-22 17:21 SINGAPORE (ICIS)–Amid falling new orders and inventory build-up, Asia’s export downturn is broadening with the latest data pointing to further weakness in factory activity across the region. The slowdown in manufacturing activity has now widened from northeast Asia to also include southeast Asia amid waning export demand. Asia’s manufacturing purchasing managers’ index (PMIs) fell in October to an average of 49.6, down from 50.7 in September, due largely to a fall in new orders and lower production as export orders weakened further.
China’s Oct petchem market falls on oversupply, poor confidence
By Yvonne Shi 02-Nov-22 12:57 SINGAPORE (ICIS)–China’s petrochemical market fell significantly in October. As of October 31, the ICIS China Petrochemical Price Index (which tracks 17 commodities) dropped 5.4% from September 30 to close at 1220.11 points. The quick fall after a sharp rise after the National Day holiday reflects sluggish demand and lack of market confidence. China’s petrochemical market started the downtrend from the middle of the month till the end. An official source before the 20th National Congress of the Communist Party of China disclosed that China’s epidemic prevention and control will continue to adhere to the zero-COVID policy, which hit market confidence severely.
UK manufacturing sector output contracts further as new orders dry up
By Tom Brown 01-Nov-22 20:00 LONDON (ICIS)–UK manufacturing sector output slipped further into contraction in October, and hit a 29-month low as new order volumes shrank at the fastest rate since May 2020, according to data from S&P Global on Tuesday. The sector purchasing managers’ index (PMI) fell further in the month, dropping to 46.2 from 48.4 in September, although they were stronger than initial readings for the month of 45.8. A PMI score below 50.0 signifies contraction. It was the third consecutive month of contraction for the sector, as the economic outlook continued to deteriorate. New orders and new export business both declined in the month. Players in the UK cited softer demand from China, the war in Ukraine and ongoing obstacles to exporting posed by Brexit. Business optimism slipped to the lowest level since the height of the COVID-19 pandemic.
China posts 3.9% Q3 GDP growth; President Xi secures third term
By Pearl Bantillo 24-Oct-22 13:21 SINGAPORE (ICIS)–China posted an annualised GDP growth of 3.9% in the third quarter, up from 0.4% in the previous quarter, but a combination of a zero-COVID policy and a property downturn will continue to weigh on the world’s second-biggest economy.
US economy continues to slow, recession likely – NABE survey
By Stefan Baumgarten 24-Oct-22 22:00 HOUSTON (ICIS)–The US economy continues to slow and is likely already in recession or may soon be in recession, according to findings in the latest business conditions survey by the National Association for Business Economics (NABE) on Monday.
INSIGHT: Asia C3 to face headwinds in fourth quarter
By Julia Tan 25-Oct-22 10:00 SINGAPORE (ICIS)–The Asian propylene market is facing headwinds as it steps into the fourth quarter as demand looks likely to remain weak until the end of the year on poor derivative margins.
China PP lacks post-holiday support as weak demand overshadows high costs
By Zhibo Xiao 27-Oct-22 12:34 SINGAPORE (ICIS)–Domestic polypropylene (PP) prices in China rose and then fell after the country’s National Day holiday on 1-7 October as bearish demand outweighed the brief surge in crude values.
INSIGHT: A new world for Asia olefins as capacity surges, demand remains uncertain
By Amy Yu 28-Oct-22 12:00 SINGAPORE (ICIS)–The Asia olefins industry is witnessing a new world of significantly squeezed margins for all producers, with incremental capacity addtions set against the backdrop of weak demand.
CDI Economic Summary: Recession odds rise as slowdown takes hold amid Fed tightening
By Kevin Swift 27-Oct-22 23:07 CHARLOTTE, North Carolina (ICIS)–Monetary tightening across the world led by the US Federal Reserve, protracted inflation and geopolitical events have raised the odds of recession in many major economies.
Asia petrochemicals stay bearish as China keeps zero-COVID policy
By Nurluqman Suratman 21-Oct-22 11:40 SINGAPORE (ICIS)–Bearish sentiment prevails across Asia’s petrochemical markets with no immediate end in sight on China’s zero-COVID strategy, which has been weighing on overall industrial activities of the world’s second-biggest economy.
South and East Asia LAB quiet while rising feedstock costs squeeze margins
By Clive Ong 20-Oct-22 17:02 SINGAPORE (ICIS)–The linear alkyl benzene (LAB) market in East and South Asia remains quiet while suppliers talked of squeezed margins from rising feedstock costs. The desire for higher values, however, were countered by the persistently weak demand in the region.
India, SE Asia ethanolamines remain under pressure from competitive offers
By Clive Ong 20-Oct-22 15:13 SINGAPORE (ICIS)—The ethanolamines markets in southeast Asia and India remain under downward pressure from competitive offers and tepid demand. Participants anticipate further weakness in the near term as the Chinese market looks set to remain weak.
INSIGHT: Japan economy to find succor in automotive output recovery
By Pearl Bantillo 20-Oct-22 12:25 SINGAPORE (ICIS)–Japan may be able to count on a recovery in car production, which should provide much-needed boosts to related industries, including petrochemicals, to cushion its economic downturn.
INSIGHT: European home improvement sector slumps on economic slowdown, post-COVID effects
By Nicole Simpson 19-Oct-22 21:33 LONDON (ICIS)–As the threat of recession looms over Europe and consumers look to cut back on unnecessary spending, demand for home improvement and do-it-yourself (DIY) goods has plummeted.
Asia oleochemicals market likely flat in Q4 on zero-COVID policy in China
By Helen Yan 19-Oct-22 12:44 SINGAPORE (ICIS)–Asia’s oleochemicals market is expected to remain flat in the fourth quarter due to the prevailing sluggish demand from China amid its zero-COVID policy, which is expected to remain in place for the rest of this year.
INSIGHT: Global demand slump eclipses Asia export benefits from currency falls
By Pearl Bantillo 18-Oct-22 13:14 SINGAPORE (ICIS)–Asia’s tumbling currencies will not spell strong exports for the region as a combination of surging inflation and high interest rates slows the pace of global economic activities.
EPCA ’22: Chemicals supply chains lengthening, security of supply increasingly important – Vopak CEO
By Nigel Davis 07-Oct-22 17:40 BERLIN (ICIS)–Chemicals supply chains are becoming necessarily longer as consumers and producers see markets balancing between imports and local production, the CEO at tank storage operator Vopak said this week.
China September petrochemical markets up; demand outlook still bleak
By Yvonne Shi 11-Oct-22 14:16 SINGAPORE (ICIS)–China’s petrochemical markets were mostly higher in September on supply tightness in some products and aided by pre-holiday restocking, but overall demand is not expected to improve by much in the coming months.
IMF trims developing Asia growth outlook on China weakness
By Nurluqman Suratman 12-Oct-22 12:46 SINGAPORE (ICIS)–The International Monetary Fund (IMF) has trimmed its economic growth forecast for emerging and developing Asian economies on account of China’s slowdown.
Asia BDO market faces lengthening supply, uncertain demand
By Clive Ong 13-Oct-22 13:07 SINGAPORE (ICIS)–The nascent recovery in Asian’s 1,4-butanediol (BDO) market in September now faces the challenge of lengthening supply with demand staying uncertain.
Singapore Q4 GDP growth slows to 4.4%, monetary policy tightened
By Nurluqman Suratman 14-Oct-22 11:37 SINGAPORE (ICIS)–Singapore’s central bank on Friday tightened its monetary policy to dampen persistent price pressures which has slowed its economy to a year-on-year growth of 4.4% in the fourth quarter.
EPCA ’22: Chemical industry may slow but must manage through cycle, Equate CEO
By Nigel Davis 06-Oct-22 17:11 BERLIN (ICIS)–The chemical industry may slow over the next 12 months but it is a question of managing through the cycle, Equate’s CEO Naser Aldousari said on the sidelines of EPCA 2022 on Wednesday. Aldousari remains optimistic for the sector and emphasises its resilience.
Asia Q4 petrochemical demand faces headwinds as global economy slows
By Felicia Loo 06-Oct-22 14:28 SINGAPORE (ICIS)–Petrochemical demand in Asia will be largely undermined because regional factories face continued weakness in export demand in the fourth quarter.
EPCA ’22: COVID-19 pandemic set gender parity back a generation – Dow exec
By Tom Brown 05-Oct-22 23:21 BERLIN (ICIS)–The impact of the COVID-19 pandemic set the progress of gender parity back 30 years, Dow’s head of inclusion and diversity said on Wednesday, because of the disproportionate impact it had on women’s participation in the labour market.
EPCA ’22: Europe ADA, nylon 6,6 demand may weaken further in October
By Marta Fern 05-Oct-22 16:00 LONDON (ICIS)–European adipic acid (ADA) and downstream nylon 6,6 markets face affordability concerns, high costs of production and competition with lower priced imports from Asia.
EPCA ’22: European auto output will only recover to pre-pandemic levels in 2025 – analyst
By Jonathan Lopez 04-Oct-22 18:21 BERLIN (ICIS)–Production from the European petrochemicals-intensive automotive sector is unlikely to recover to pre-pandemic levels until 2025 at the earliest, a chemicals analyst at the Boston Consulting Group (BCG) said on Tuesday.
Andreas Gocke, global lead for chemicals at BCG, said the war in Ukraine and supply-chain issues have only seen a further deterioration in the outlook for the automotive sector, which was already negative in 2021.
EPCA ’22: Weak demand, wider uncertainty shapes Europe acrylate esters outlook
By Mathew Jolin-Beech 04-Oct-22 22:00 LONDON (ICIS)–Europe’s acrylate esters markets are set to be gripped by ongoing weak demand and wider macroeconomic uncertainty in Q4 and early 2023.
EPCA ’22: PODCAST: Europe petrochemicals face ‘winter of discontent
By Will Beacham 04-Oct-22 15:19 BERLIN (ICIS)–Europe’s petrochemical sector faces a ‘winter of discontent’, battered by high energy costs, collapsing downstream demand and increased imports from Asia. In this Think Tank podcast, Will Beacham interviews ICIS Insight editor Nigel Davis, ICIS senior analyst Lorenzo Meazza, and Paul Hodges, chairman of New Normal Consulting. The European Petrochemicals Association (EPCA) annual meeting runs on 4-6 October in Berlin.
EPCA ‘22: Demand concerns loom over Europe PC market in Q4
By Miguel Rodriguez Fernandez 03-Oct-22 19:14 LONDON (ICIS)–Pessimism reigns in the European polycarbonate (PC) market moving into the end of 2022 as demand from the key customer sectors is likely to remain tepid due to Europe’s dim macroeconomic outlook.
INSIGHT: Trends converging to create Q4 glut in US plastics
By Al Greenwood 30-Sep-22 05:21 HOUSTON (ICIS)–North American polymer markets are facing a growing glut because of weakening demand, expanding capacity and rising inventories.
Europe economic sentiment dropping as Germany on brink of recession
By Morgan Condon 29-Sep-22 23:13 LONDON (ICIS)–European economic sentiment continued falling in September, for both the EU and the eurozone, and the German economy is heading towards a recession, as sentiment is shaped by sustained high energy prices.
Lockdowns, property crisis to slow China 2022 GDP growth to 2.8% – World Bank
By Nurluqman Suratman 29-Sep-22 13:3 SINGAPORE (ICIS)–China, the world’s second-biggest economy, is projected to grow at a much slower pace of 2.8% this year compared with an earlier forecast of 5.0%, according to the World Bank, amid the country’s zero-COVID policy and ongoing property crisis.
INSIGHT: India PVC market weathers stormy first half, safeguard investigation begins
By Damini Dabholkar 29-Sep-22 11:00 SINGAPORE (ICIS) –India’s polyvinyl chloride (PVC) market stabilised slightly in September, after having weathered a storm over the previous 12 months.
China’s PE prices rebound, eyes on demand sustainability
By Sijia Li 28-Sep-22 12:11 SINGAPORE (ICIS)–China’s polyethylene (PE) prices have rebounded following continual declines in the past two months, finding support from improved end-user demand during the September-October traditional peak season.
INSIGHT: High cost threatens Asia petrochemical output as regional currencies tumble
By Pearl Bantillo 27-Sep-22 12:26 SINGAPORE (ICIS)–Asia’s petrochemical production is at risk of shrinking further as imported raw materials get more expensive each day that Asian currencies tumble to new lows.
INSIGHT: Russia-Ukraine war, surging inflation continue to dim growth expectations
By Tom Brown 27-Sep-22 00:17 LONDON (ICIS)–The outlook for global growth is continuing to darken as the economy loses momentum in the wake of the Russia-Ukraine war, with fresh economic projections pointing to a substantial deterioration in prospects from 2023 even relative to a few months ago
US HB Fuller sees rebound in Asia, slowdown in Europe
By Al Greenwood 23-Sep-22 05:43 HOUSON (ICIS)–HB Fuller began to see a rebound in Asian demand during its fiscal third quarter because China is reopening from its COVID-19 lockdowns, the US-based adhesives producer said on Thursday, a trend that other chemical producers have yet to see.
INSIGHT: US plastics becomes sixth-largest industry
By Melissa Wheeler 22-Sep-22 23:21 HOUSTON (ICIS)–The US plastics industry has moved two spots up to become the sixth-largest industry in the country, according to the Plastics Industry Association (PLASTICS).
Asia MEG market under pressure as downstream cuts operation to ease high inventories
By Judith Wang 22-Sep-22 18:13 SINGAPORE (ICIS)–Asia’s monoethylene glycol (MEG) market has been under pressure during the week as downstream polyester sector initiated another round of operation cuts in a bid to relieve inventory pressure.
INSIGHT: Widespread demand reduction makes a tough quarter tougher
By Nigel Davis 21-Sep-22 23:49 LONDON (ICIS)–It has been a tough third quarter for most upstream producers of chemicals and others as weaker demand and rising costs have combined to hit earnings and shift guidance.
US inland truck capacity increases as demand remains firm
By Adam Yanelli 21-Sep-22 05:15 HOUSTON (ICIS)–Spot and contract rates for inland truck deliveries have fallen from record-highs as capacity has increased and demand has remained strong, according to panelists on a webinar hosted by supply chain market intelligence provider Freightwaves.
INSIGHT: Asia petrochemical market to rebound in September
By Amy Yu 15-Sep-22 18:17 SINGAPORE (ICIS)– Some Asia petrochemical prices rebounded in early September after the decrease in August.
China Aug petrochemical prices fall on poor consumption; Sept demand picks up
By Yvonne Shi 13-Sep-22 15:53 SINGAPORE (ICIS)–China’s petrochemical prices weakened in August amid poor consumption and declines in crude values.
INSIGHT: China’s PP market bearish in Jul-Aug, eyes on demand performance
By Zhibo Xiao 12-Sep-22 17:21 SINGAPORE (ICIS)–China’s polypropylene (PP) prices were on a downtrend in July-August, due to subdued domestic and overseas demand. Moving forward, demand is likely to pick up on the traditional peak season in September and October and more export opportunities.
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