S & P Global: Global polyethylene and acryline profit margins will remain low

Recently, a number of persons in charge of S & P global commodity insights said at the World Petrochemical Conference held by Houston that the polyethylene and acryline industries will cause low profit margins due to imbalances in supply and demand.

Jessis Titerina, the global polymerist of the S & P Global, said that the severe imbalance in supply and demand has caused the global polyethylene market to fall into a trough. The profit margin of the polyethylene industry may not be recovered until 2024, and some factories will have to be closed permanently.

Tigarina said that from 2012 to 2017, the supply and demand growth rate of polyethylene resins was roughly the same, but the production capacity exceeded the demand of about 10 million tons/year. By 2027, the new production capacity will exceed 3 million tons/year. In the long run, the polyethylene market is growing at a rate of about 4 million tons/year. If it stops increasing production capacity now, the market still needs about 3 years to reconnect. "Looking back at 2022, many manufacturers temporarily closed high -cost assets. We believe that many temporary shutdown production capacity may be permanently closed in the future."

Larry Tan, the person in charge of the Asia -Pacific region, said that the surge in the production capacity of propion dehydrogenation (PDH) has caused a serious excessive supply in the acrylic market, which will keep the profit margin of the acrylic industry low in 2025. The global propylene industry is currently at a trough, and the profit margin will not be improved until 2025. In 2022, the continuous rise in production costs and weak demand made many of many acrylic manufacturers in Asia and Europe maintained a low level or converted to negative value. From 2020 to 2024, the growth of polymers and chemical propylene capacity is expected to increase by 2.3 times higher than demand.

However, TAN also said that by 2028, except for the stone brain lobe of Western Europe, the profit margin of all manufacturers should be "relatively good." The two largest sources in the petrochemical industry are PDH and catalytic catalytic cracking. S & P Global expects that energy transformation will promote the decline in demand for vehicle gasoline, and one of the consequences will be that the catalytic cracking operating rate will be reduced. Tan said: "Therefore, when the global acrylic demand continues, the inadequate propylene part must be filled by somewhere." The PDH device will only see considerable profits at this time.