Viewpoints 2021: Petrochemicals

Author Bohan Loh, Editor, Petrochemicals

Argus editors look at how the coronavirus pandemic is affecting different petrochemical markets worldwide amid ongoing trade tensions and the continued ramp-up of China’s production capacity.

The global petrochemical market has generally benefited from the ongoing Covid-19 pandemic with double-digit demand growth seen for packaging, personal protective and medical equipment, furniture and home appliances.

Prices for most petrochemical products have recovered to pre-pandemic levels by the start of 2021, but with the world’s second largest economy, China, still in the midst of a massive build-up in its own manufacturing capability, this year may see further rationalization and changes in global petrochemical trade flows.

All this is taking place against a backdrop of simmering trade tensions and a likely global re-focusing on efforts to combat global warming, which had to some degree been set aside while the world battled the pandemic.

Viewpoints

Asian ethylene sector braces for new supply
The Asian ethylene market is preparing for a challenging year, with 11 ethylene crackers expected to come on line in 2021 — eight in China, two in South Korea and one in southeast Asia. But new derivative capacity may keep merchant ethylene supply balanced.

Petchem demand to drive China’s LPG imports
China's expanding petrochemical sector is expected to boost the country's LPG import demand in 2021, helping to offset a contraction in LPG imports from the wholesale sector over the last year as a result of the Covid-19 pandemic.

China's PTA expansion to cap margins in 2021
Production margins for purified terephthalic acid (PTA) will come under pressure in 2021 because of China's massive capacity expansion. This pressure will be particularly pronounced in the domestic Chinese market.

Turkish polymers prices to remain elevated
Turkish polymer markets approach 2021 with prices at their highest in more than a year, and this is likely to remain the case until at least late in the first quarter. By Dila Odluyurt.

NWE propane tightness to cap petchem demand
A winter of reduced propane demand from the northwest European petrochemical sector is a pre-shale boom throwback that some early-career traders may not yet have witnessed. But this scenario is likely, after a sustained run of relative propane price strength versus competing feedstock naphtha saw plans for the flexible portions of local cracker slates reshuffled. By Peter Wilton.

NWE benzene to bow to pressure in 1Q
The European spot benzene market will bow to renewed pressure in the first quarter of 2021 after a price rise in December triggered by supply curbs arising from cracker production issues and unseasonably robust demand. By Monicca Egoy.

US toluene, MX facing derivative challenges
Increased global supplies of aromatics derivatives in Asia could curb chemical demand for US toluene and mixed xylenes (MX) in 2021. By John Dietrich.

US Rbob change to support European toluene
European toluene prices will be supported in 2021 by demand for aromatic blending components arising from US Rbob gasoline specification changes. By Sam Carew.

US benzene, styrene face lower 2021 demand
US benzene could see lower demand from styrene production in 2021 as added styrene capacity in China may result in lower US styrene exports to Asia. By John Dietrich.

US ethylene may ease in 2021
US spot ethylene prices are expected to give back some recent gains during the first quarter as a recent surge in export demand is poised to wane with Asia crackers returning to normal operations. By Michael Camarda.

US PP supported by tight propylene in 2021
US polypropylene (PP) contract prices are expected to remain higher for much of the first quarter of 2021 as ongoing tight supplies, strong demand and feedstock limitations allow producers to hold onto recent margin gains. By Michelle Klump.

US 2021 PE supported by higher global prices
An expected easing of US polyethylene (PE) contract prices in the first half of 2021 will be tempered by ongoing global demand growth, including the shutdown of a major PE source in Mexico. By Michelle Klump.

Argus Global Polyethylene and Argus Global Polypropylene
Argus has two services to provide readers with an in-depth view of petrochemical feedstocks, resin pricing, buy-side information and freight. Learn more by visiting the product pages:
Argus Global Polyethylene
Argus Global Polypropylene

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