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The global chemical market growth rate will continue to slow down in the next few years

Views:8     Author:Site Editor     Publish Time: 2019-01-14      Origin:Site

Nariman Behravesh, chief economist of IHS Markit, said recently that the global chemical market is expected to continue to grow in 2019. The global chemical production growth rate will drop from 3.2% in 2018 to 3.0% in 2019. The year will continue to slow down. In 2019, the US economic growth rate and chemical production will maintain a rising trend, and the development of other major economies will slow down. IHS Markit expects global industrial production growth to fall to 2.8% from 3.1% in 2018.


The US market is growing obviously


Kevin Swift, chief economist at the American Chemical Council (ACC), said that the US chemical industry will outperform the global market in 2018 due to strong growth in key end markets and a rich supply of superior energy and raw materials. US chemical production is expected to increase by 3.6% in 2019, up from 3.1% in 2018.


Martha Moore, senior director of policy analysis and economics at ACC, said: "As new capacity is put into production, demand in key end markets will grow strongly, and US chemical production will continue to grow substantially. As long as the export market is open to our producers, it comes from US shale raw materials. The chemicals will be able to meet the ever-expanding global demand. In the specialty chemicals sector, growth will increase by 3.7% in 2018 and production by 2.2% in 2019. Oilfield chemicals, electronic chemicals, coatings, adhesives, cosmetics chemistry Segments such as products, fragrances and fragrances are leading the growth of the specialty chemicals market. It is expected that demand for specialty chemicals will grow with the growth of the industrial and construction industries in the coming years."


Emerging economies are slowing growth


Economic growth in emerging economies has now peaked and will slow in 2019, with growth rates rising from 4.7% in 2017 to 4.8% in 2018. IHS Markit expects the growth rate of emerging economies to fall again to 4.7% in 2019. At the same time, the Chinese economy is expected to continue to slow down. IHS Markit predicts that the average annual growth rate of demand for major chemicals in China will be 5% to 7% in the next four years, which is significantly lower than the historical growth rate in recent years.


Despite this, the industry is still full of confidence in China as a place of investment. In 2018, several world-scale projects have been announced, and Chinese companies will bring a large wave of capacity expansion in the next four years. According to BASF, China will account for about 50% of global chemical growth from 2017 to 2030, and currently accounts for about 40% of the global chemical market.


India is similar to China, with chemical production expected to increase by 6.2% in 2019 and growth of 6.5% in 2017.


The outlook for the European chemical industry, especially the petrochemical industry in the region, remains uncertain. After strong growth in the first half of 2018, chemical production and consumption in the region began to decline and fell sharply in November. On the other hand, in less than three months after the Brexit resignation, the Brexit agreement has not yet been reached, and the chemical industry is increasingly worried that there may be no agreement.


Chemical market trend is unpredictable


Commodity markets, including energy and raw materials, will continue to fluctuate and have downside risks. IHS Markit predicts that the recent agreement on production cuts between OPEC and Russia will support oil prices. Behravesh said: "We expect oil prices to rise slightly in the near future. Oil prices averaged around US$70/barrel in 2019, while oil prices averaged US$71/barrel in 2018. That is, considering the slowdown in demand growth and supply, oil and The risk of other commodity prices is mainly down."


By the end of 2019 or early 2020, the supply of ethylene in the US Gulf Coast will continue to be surplus. Only when new downstream derivative units are put into operation, and the export capacity of ethane increases, the market balance will be improved, and ethylene prices will rise and make profits. Improve ability. IHS Markit analysts said raw material ethane supply will remain tight until the new natural gas condensate (NGLs) fractionation unit and transport pipeline are put into production, and stocks will improve as early as 2020.


Since the beginning of 2017, with the completion of four new ethane crackers and two expansion projects, the consumption of ethane in the US Gulf Coast has increased by 350,000 barrels per day. At the beginning of 2018, as demand increased, ethane prices increased. Subsequent uranium stocks in the third quarter caused US ethane prices to soar, reaching a high of 61.5 cents per gallon in mid-September. By mid-December, ethane prices had fallen back to near fuel prices, but only temporarily closed.


For the chemical market, the key risk in 2019 will be a sharp drop in world trade growth. The tension between the United States and its major trading partners is bound to affect the flow of chemicals.


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