Episode 1083: Think Tank: Huge pressure to close petrochemical plants as global overcapacity grows
As waves of new capacity come onstream in China and the Middle East, stagnant demand growth and falling margins are increasing pressure on chemical companies to permanently close older facilities. - Wave of oil-to-chemicals projects will flood market - Global operating rates forecast at 80% to 2030, from 88% long term average- Huge pressure on non-integrated/high-cost facilities to close- More plant closures could be driven by high costs, low demand, decarbonization - High closure costs include environmental cleanup, redundancy payments- Upstream integration to refineries prevents closures- Chemical industry could reinvent itself as service provider - Q3 Europe margins low or negative- Q4 cracker margins improve as oil prices fall - No sign of improvement in downstream demand