How is the coronavirus affecting China’s petrochemicals sector?

Measures introduced to curb the spread of the coronavirus outbreak in China are already disrupting economic activities and the country’s petrochemical industry is no exception. The extended Chinese new year holiday period and restricted movement are affecting the entire chemicals value chain: downstream demand is weak, plant personnel are being hindered in their return to work and plant operating rates are being lowered. Olefins and its derivatives as well as the aromatics chain are not being spared. We expect the new coronavirus outbreak will have a much bigger impact than the SARS (severe acute respiratory syndrome) outbreak did in 2003. While China’s chemical industry took a hit from SARS, it quickly recovered on the back of the country’s impressive economic growth momentum at the time. But the economic background isn’t so favourable in 2020.