Five reasons why polyethylene markets are largely resilient in 2020

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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?

Table of contents

  • 1. Strong demand growth in China
  • 2.Stockpiling consumer non-durables and temporary pause to the single-use plastics bans
  • 3. Low oil prices support the use of polyethylene
  • 4. Virgin resin revival
  • 5. Structural changes in polyethylene demand

Tables and charts

This report includes 7 images and tables including:

  • Courier delivery sector has seen strong growth in China
  • Monthly deliveries in China rebounded fast from March
  • Chinese polyethylene manufacturers’ inventory has remained low since resuming operation
  • Chinese polyethylene imports spiked after production resumed, with a significant increase in US imports
  • Polyethylene has higher exposure to consumer non-durables and packaging and lower exposure to transportation and construction
  • Historically, lower crude oil prices support higher polyethylene demand
  • Even the most optimistic forecasts do not predict lockdown measures being lifted in 2020

What's included

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    Five reasons why polyethylene markets are largely resilient in 2020

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