CHEMICAL MANAGEMENT

Global polyethylene demand boom likely, increasing the sustainability challenge

JOHN RICHARDSON | June 15, 2021

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IT FEELS LIKE several lifetimes ago. If you recall, way back in November-December 2019 Asian variable cost integrated naphtha-based polyethylene (PE) margins turned negative because of the increase in US capacity.

Then in January the following year, deep Asian and Middle East operating rate cuts returned some order to the market. Then, bang, as we all know, the pandemic arrived and turned everything on its head.

The pandemic has, in my view, accentuated trends that were already well underway. I believe this means that the supply-driven downturn that started in late 2019 will not return.Long before coronavirus upended everyone’s lives, PE demand was becoming increasingly divorced from GDP growth because of the shifting nature of end-use demand.

Booming internet sales was, I believe, a major factor behind the split between the growth of the overall economies in the developed world plus China and PE demand.The average product bought online is dropped 17 times because of the large number of people involved in the logistics chain, according to Forbes.

This had led to a surge in demand for protective packaging made not from PE and other polymers such as polypropylene, expandable polystyrene and PET films (I will look at their demand growth prospects in later posts).Despite sustainability pressures, the scale of demand for stuff bought online translated to a lot more consumption of virgin polymers.

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Spotlight

ESP Ultrasonic

We have been appointed as a Distributor for Envirofluid. Based in Australia, Envirofluid manufactures environmental worksafe chemical alternatives to replace dangerous and hazardous fluids like Solvents, Acids, Alkalis and other corrosive chemistries. With Plant and Bio based chemical alternatives, Envirofluid is changing the world with fluids which are safer for people and the environment. Many of the fluids are readily biodegradable - which means 70% of biodegradation is completed in 28 days of disposal, in waterways or landfills. The range includes; a) Purasolve : Bio and Plant based Solvents. b) Triple7 : Aqueous based replacements for Acids, Alkalis and other Hazardous fluids used as Metal Protection, Surface Treatment or Pickling. c) ActiveEco : Specialty formulations based on Plant Chemistries, used as a replacement for toxic chemicals.

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