Southeast polyolefins demand growth could be negative again in 2021

JOHN RICHARDSON | July 13, 2021 | 490 views

BEFORE the pandemic, GDP growth rates in the developing world were always higher than in developed economies.And because developing economies had much lower levels of petrochemicals consumption than their rich counterparts, it meant that the multiples over GDP were higher than in the rich word, where consumption was pretty much saturated.

For instance, polyethylene (PE) demand in a developed country such as Germany might have grown at 0.3% times GDP whereas in Indonesia the growth could have been one or more times higher than the rate of growth in GDP.But as The Economist wrote in this 11 July article: “In 2021 the poorest countries, which are desperately short of vaccines, are forecast to grow more slowly than rich countries for only the third time in 25 years.”

Might the multiples over GDP growth also be adversely affected in the developing world, trending lower than the historic norms?

They will almost certainly remain higher than the rich countries. But here is the thing: as millions more people are pushed back into extreme poverty by the pandemic or are denied the opportunity to achieve middle-income status, I believe that developing-world multiples may well decline.Escaping extreme poverty means being able to, say, afford a whole bottle of shampoo for the first time rather than a single-serve sachet, thereby raising per capita polymers consumption.

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At CAE Services Corporation, we offer Moldflow engineering services and more importantly . . . part design and molding solutions. Our staff can evaluate all aspects of the part design and molding process, from material selection, gate size/location to cooling related issues and warpage concerns. Ideal for those who want to eliminate trial and error methods and “Get it Right the 1st Time!”

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