Page 187 - CW E-Magazine (10-10-2023)

Special Report

WORLD CHEMICAL FORUM

Global chemical industry set for slow recovery

amidst disruptive structural changes

hemical demand is on the rise (RE), biofuels, green hydrogen, and as the drives for self-suffi ciency, and
on a global basis, but is slow- their supply chains – is seen as a big environmental, social & governance
Cing to 1.1-1.3x GDP. The ex- upside, a $10-trillion opportunity that issues) are separating markets, increase
cess supply for base chemicals – used could add 5% to world GDP between arbitrage, raising risks and lowering
to make plastics and other materials 2020-2050. market transparency.
that end up in nearly every product we
purchase – will persist for some more On a regional basis, the chemical Plastics waste issue – a critical chal-
years, and rebalancing will require both markets in North East Asia (NEA), in- lenge
signifi cant demand growth, driven by cluding China, is equal to the rest of Plastic waste dilemma, according
increasing population and increasing the world combined, and will continue to Mr. Johnson, is a critical challenge
per capita consumption, and supply to be a signifi cant driver of global de- for the chemical industry, as half of the
constraints. This was the central mes- mand, even at a slower pace of growth. global plastics market is non-durable
sage at the World Chemical Forum held While demand in NEA grew at a CAGR with potential to be recycled, and repre-
in Houston, USA from March 12-14, of about 7% in the last two decades, sents a demand risk if stringent regula-
2023. it is expected slow to around GDP for tions come into force. While global de-
the next two (2020-2040). The Indian mand for plastics in 2023 is estimated
Chemical end-use is driven by popu- sub-continent (ISC), on the other hand, to be around 380-mt, single use plastics
lation, GDP growth, and increasing will sustain a 6% growth rate to 2024 – (SUPs) like those used in food service
urbanisation. While historical chemical albeit from a much smaller base. and for retail bags – the target of cur-
demand elasticity shows typical growth rent bans – represent only about 3.5%
above GDP levels, the long-term out- According to Mr. Dewey Johnson, of the market.
look is moderated to near GDP levels. Sr. Vice President, Global Base Chemi-
cals Insight, Chemical Market Analy- Annual demand for the eight large
Though global economic growth tics (CMA), trade continues to be impor- volume plastics – HDPE, LDPE, LL-
has been stronger than expected so far tant in the chemical industry, as plants DPE, PP, PVC, PS/EPS, PVC and PET –
in 2023, the tightening of credit condi- continue to be built in regions where is expected to grow at a CAGR of
tions and the underlying infl ationary feedstock is readily and cheaply avail- 2.65% globally, with non-durable pack-
pressures likely means growth will able. But geopolitical tensions (such aging applications expected to grow
disappoint over the next year. While as the Russia-Ukraine confl ict), sus- slightly faster at 2.7% and durables
geopolitical risks and the US/China de- tainability pressures (such as extended slightly slower at 2.6%.
coupling are clear downside risks, the producer responsibility for plastics, and
‘green’ growth opportunity – from elec- Europe’s Carbon Border Adjustment According to Mr. Johnson, the
tric vehicles (EVs), renewable energy Mechanism) and country policies (such current infrastructure and scaled tech-
nology are not suffi cient to meet the
targets for eliminating plastic waste in-
cineration and preventing diversion to
landfi ll, which implies that the plastic
waste problem will, in all probability,
get worse before it gets better. “Plastics
recycling is expected to be minimal in
the long term with 15% post-consumer
recycling (PCR) in the ‘Base Case’ and
to 23% in the ‘Green Case’ by 2050.
We are very early in addressing the end-
of-life problem. It is a systemic issue,

Chemical Weekly October 10, 2023 187

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