Navigating the next cycle of the petrochemical industry

Across the wider petrochemical industry, Wood Mackenzie is forecasting a general cyclical downturn in capacity utilisation through the first half of the 2020s. This is primarily supply driven as the industry invests in new capacity additions, primarily in the construction or engineering phase, faster than the incremental growth in consumption. Through this same timeframe we expect that the prevailing crude oil price environment will increase. Oil prices set a baseline for the economics of these petrochemical industry products. By deploying Wood Mackenzie Chemicals suite of Asset Benchmarking Tools (ABTs), this insight will explore for ethylene, polyethylene, MEG, styrene, PX and PTA: In which year bottom-of-cycle operating rate conditions are expected to occur What the prevailing oil price environment will be through this period How the oil price and operating rate environment translate into global economics Strategies that companies could employ to navigate the coming cycle