MOSCOW (MRC) -- As infection rates continue to rise and European nations restrict movement in an attempt to limit the spread of the coronavirus pandemic, the European petrochemical industry is facing unprecedented challenges and uncertainty, reported S&P Global.
With borders across Europe closing, supply chain concerns are rising.
"The market is caught between a rock and a hard place, demand destruction as a result of the coronavirus pandemic and the OPEC price war which could see crude oil prices below USD20/b in the coming months. Supply chain and logistics constraints could result in producers having to cut rates regardless of margins. We are in unchartered territory but the risk for the next three to six months are still to the downside," Senior Manager Petrochemical Analytics at S&P Global Platts Rob Stier said.
The following are some of the latest developments in the European petrochemical industry: cracker operators are prioritizing balancing PE supply along the supply chain amid ample ethylene. Concerns grow over recycled polymer supply following reductions in waste collection across Europe.
Despite weak buying interest, Europe could see more methanol cargoes from Middle East as India starts 21-day lockdown.
Caustic soda market continues on an upward trend, as chlorine shortages cause increasingly tight market in Europe.
UK supply becomes more localized as buyers refrain from importing from Northwest Europe, according to sources.
PVC demand is expected to drop 25-30% in April due to the impact of the coronavirus on converter operations and downstream on construction projects, according to sources.
Demand for diethylene glycol in Poland remains robust despite the EU-wide lockdowns as the market looks to cover volumes.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,093,260 tonnes in 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments rose from both domestic producers and foreign suppliers. The estimated PP consumption in the Russian market was 1,260,400 tonnes in January-December 2019, up by 4% year on year. Supply of almost all grades of propylene polymers increased, except for statistical copolymers of propylene (PP random copolymers).
MRC