CHEMICAL MANAGEMENT

Southeast polyolefins demand growth could be negative again in 2021

JOHN RICHARDSON | July 13, 2021

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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.

Spotlight

Sapio Group

Sapio has been operating as a market leader on the Italian market in the industrial and medical gases sector for 90 years: in fact, it was founded in 1922. Today, the enterprise is an industrial group (member of Assogastecnici, the Federchimica [Chemical Federation] association for the industrial and medical gases sector) able to completely satisfy the market’s requirements and necessities and with the potential for developing new technologies and new services personalised for the single entrepreneurial concerns.

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CHEMICAL MANAGEMENT

Southeast polyolefins demand growth could be negative again in 2021

Article | July 13, 2021

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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Can credit trading drive dollars to plastics recovery?

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Exploring the potential impact of Brexit on the chemical industry

Article | July 13, 2021

With Brexit officially underway, the UK has entered the transition period during which arrangements affecting the chemical industry will be made. The chemical sector produces around £50 billion worth of exports annually, and 60% of this goes directly to the European Union [1]. 75% of our chemical imports also come from the EU [1], making Brexit a critical time for the sector. The future of trading is yet to be established. Now is a pivotal period during which the chemical industry, stakeholders and the government need to work together to determine this future, in order to allow for a continuation of chemistry enabled growth.

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Spotlight

Sapio Group

Sapio has been operating as a market leader on the Italian market in the industrial and medical gases sector for 90 years: in fact, it was founded in 1922. Today, the enterprise is an industrial group (member of Assogastecnici, the Federchimica [Chemical Federation] association for the industrial and medical gases sector) able to completely satisfy the market’s requirements and necessities and with the potential for developing new technologies and new services personalised for the single entrepreneurial concerns.

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