Five reasons why polyethylene markets are largely resilient in 2020
Coronavirus has hit the world economy. Wood Mackenzie expects global GDP growth in 2020 will contract by 5.4%, and this is already weighing on the consumption of major commodities. The impact on petrochemical industry margins has also been noticeable, mainly attributed to overcapacity and low crude oil prices. However, demand in this sector has been slightly more resilient, thanks to the versatility of polyethylene. In this insight, our team evaluates why polyethylene markets are growing when the global economy is weakening. We go well beyond the traditional GDP elasticity matrix and understand how granular tracking of the global polyethylene market can spot the structural changes in demand patterns. Five matrices are, 1). Chinese polyethylene market 2). The trend towards temporary stockpiling - is it temporary? 3). How low oil price supports polyethylene consumption? 4). Is recycled polyethylene still economical? 5). What are the structural demand changes?