Growth in major Asian economies drives demand for petrochemical products

The COVID-19 epidemic has severely affected the global economy in 2020. GlobalData said that the growth of major Asian economies is expected to rebound in 2021, because containment measures and stimulus programs may increase economic activity in the region and boost demand for petrochemical products.

GlobalData Oil and Gas Analyst John Paul Somavarapu said: “The increase in production capacity in the region is mainly concentrated in China, and the goal is to achieve self-sufficiency to meet the country’s existing and growing demand for petrochemical products. Next are India and Indonesia, which also Taking advantage of their growing demand. The outbreak and falling crude oil prices have prompted petrochemical giants in the two regions to announce project delays. Projects in the early stages of development may be delayed because companies want to reassess their investment strategies."

Because governments of various countries have adopted blockade measures to control the pandemic, the demand for polymers in Asia has been affected. However, the recent increase in industrial/commercial activities and the gradual reopening of the economy will definitely increase the demand for polymers. Due to weak demand and reduced growth in the manufacturing supply chain, demand in key end-use sectors such as construction and automobiles has been affected. However, demand from the packaging and healthcare sectors will sustain the growth of the industry.

Somavalup concluded: “The COVID-19 pandemic is unprecedented. Companies have developed strategies and implemented strict measures to deal with this economic uncertainty and weak growth. Companies use capital investment to maintain existing Asset base, and strategically assess the current situation, and arrange development projects accordingly."