Global petrochemical and polymer producers are facing a significant oversupply on the back of sluggish demand from China, a new survey has revealed.
“Petrochemicals and polymers now face a major supply glut and at the same time, paradigm shifts are taking place in demographics which will ultimately change the supply and demand landscape completely,” said Paul Hodges, co-author of the study, which analyses the potential impact of developments on the olefins, aromatics and polymer value chains over the next 10 years.
The survey also challenges current perceptions about the oil and petrochemical super cycle and assesses the impact of China’s change of economic direction on global supply and demand.
“A number of myths are now being exposed: China is not middle class; oil prices are not going to be relatively more expensive than gas; central bankers cannot control the economic destiny of 7.3bn people by printing money,” Hodges added.
“To survive, organisations must develop new business models focused on developing new products and services to respond to critical areas for the global economy such as water and food availability, and to supply the 1.8bn New Olders. Staying the same is simply not an option,” said John Richardson, also a co-author of the study.