In the post-epidemic era, The direction of China's economy, global and Chinese energy and petrochemical industry market analysis and forecasting have attracted much attention. IHS Markit gave the answer at the "Global Energy and Chemical Market Outlook" at the China International Petroleum and Chemical Conference On October 28, 2021.
Zhao Zhiping, deputy secretary-general of the China Petroleum and Chemical Industry Federation, pointed out in his speech: In the first half of 2021, the industry has achieved gratifying results, and the output, sales volume and market consumption of major petrochemical products have increased significantly. However, the industry is also facing certain challenges, and the high price of products is difficult to alleviate in the short term. The "dual control of energy" and the curtailment of electricity and production in September in China have caused many chemical enterprises and parks in many places to limit production and stop production, which has further aggravated the shortage of supply and demand in the domestic market.
Xu Yating, senior economist at IHS Markit, mentioned in the "China Economic Outlook in the Post-epidemic Era" report that Chinese mainland become the only major economy in the world to achieve positive GDP growth in 2020, thanks to the expanding vaccination rate and effective policy response, Chinese mainland will continue to lead world economic growth in the next two to three years. Highlighting innovation, high-quality growth and security, the 14th Five-Year Plan is expected to address fundamental problems such as debt backlogs, productivity slowdowns, and high savings rates, and provide new sources of energy for medium- and long-term growth.
Liu Haiquan, Executive Director of IHS Markit Oil Markets and Midstream Consulting, mentioned in the "Energy Transition in the Refining and Petrochemical Industry" that despite the unprecedented epidemic in the world, 2020 is a critical year for energy transition. Net zero carbon emissions or carbon neutrality are the headlines every day, coming to mind by governments, businesses and even individuals. However, China is still in the early stages of the transition process, and given that the energy transition is multifaceted, there is a lot of ambiguity and uncertainty. IHS Markit analyzes the latest ideas on what the energy transition means for the refining and petrochemical industries, and how key parts of the fossil fuel industry can innovate to fit the future.
Ravi Narayanaswamy, Vice President of Petroleum Markets, Oil & Gas Midstream, and Chemicals Business Development, IHS Markit Middle East and Indian Subcontinent, mentioned in the report "From Fuels to Chemicals – The Future of Refining and Chemical Integration" that the energy transition and the efficiency gains it brings are expected to peak demand for refined products this early 2030s. Refiners will need to consider possible options to strengthen petrochemical integration. The report mentions a number of options for refineries to invest in brownfields and new lands to remain competitive.
In his report "Olefin Market Outlook under the New Normal", Chen Weiming, Executive Director of IHS Markit's Basic Chemicals Division, mentioned that the global industry is currently in a construction cycle. In the Chinese mainland, due to the high efficiency of project execution, the capacity increase will be advanced from 2022-25 to 2019-23, and there will be more capacity increases in 2021-23. Capacity is increasing much faster than demand. While demand is recovering rapidly from the COVID-19 pandemic, logistics issues are disrupting the flow of ethylene and its derivatives from the place of production to the place of demand. Due to the high cost, the MTO/CTO may need to reduce the operating rate, thereby pushing up the operating rate of the steam cracker. Other coal chemicals in Chinese mainland, such as VCM and MEG, are also at risk due to increasing environmental pressures and a shift to ethylene-based supplies. Overall, supply and demand fundamentals are expected to kick-start and depress price/margins, forcing production cuts.
Yang Wei, Director of the Specialty Chemicals Division of IHS Markit, mentioned in the "Specialty Chemicals Market" report that due to the impact of the new crown epidemic, the decline in automobile production and the decline in crude oil prices have negatively affected the entire specialty chemicals market. However, some specialty chemical industries performed well. The multiple applications of special chemical products enable enterprises to operate stably and avoid risks under special circumstances. Innovation and new technologies will become a powerful driving force for the expansion of the specialty chemicals market. Consumers are becoming an important player in the entire manufacturing chain. The pattern of specialty chemicals industry provides an information basis for the strategic formulation of petrochemical enterprises and specialty chemical enterprises.
In his report "Plastic Recycling, Carbon Emissions and Circular Economy," Anthony (Tony) J. Palmer, Vice President of Plastic Recycling and Sustainability at IHS Markit, notes that the plastic ecosystem is in a transitional phase where companies design waste to use resources as long as possible, extract maximum value during use, and then recycle and regenerate valuable products and materials at the end of their useful life. In addition, as fuel demand peaks, this shift occurs amid broader structural shifts in the energy transition, raising the risk of plastic demand and raising the challenge of balancing emissions with end-of-cycle targets for plastics. The transition from plastics to a circular economy raises key issues that must be addressed through common goals and standards, complemented by data to determine the best path forward.
Mr. Ashish, currently executive director of aromatics marketing in IHS Markit Asia, mentioned in the report "Aromatics Market: Market Outlook in the Post-PANDEMIC Era" that in 2021, the profits of the aromatics industry chain are much higher than most people expected, but the substantial growth of Chinese mainland capacity is constantly threatening the maintenance of these profit margins. The report focuses on short-term forecasts for the market and briefly discusses the main trends in the long-term market in the future.