ICIS conference to address shifting dynamics in Southeast Asia's polymer markets

ICIS conference to address shifting dynamics in Southeast Asia's polymer markets

Southeast Asia's polymer markets, particularly polypropylene (PP) and polyethylene (PE), are facing complex challenges influenced by shifting supply and demand dynamics. ICIS (Independent Commodity Intelligence Services), hosting the 8th ICIS Asian Polyolefins Conference on November 7-8, 2023, in Ho Chi Minh City, Vietnam, highlights the polymer supply and demand situation in the region, along with the growth of the region's polymer market. A surplus of PP raises concerns that it may outweigh any potential demand improvements. ICIS explains that various factors influence demand for polyolefins.

“Demand for polyolefins would depend on changing consumer patterns (e.g. less use of single use plastics, or use of refill packs vs bottles); economic growth factors (inflation rates, exchange rates, real income growth, banking and financing for loans); inventory levels at plastic converters or plastic good manufacturers; and price of raw materials (which in turn would affect the price of PE/PP resins)”, it said.

In previous findings by ICIS, the critical situation unfolded in June when PP producers struggled to find buyers due to slow demand recovery in China and oversupply. China's PP imports fell by 3% year-on-year in the first half of 2023, worsened by sluggish domestic consumption and economic challenges in export markets. Plant restarts in Southeast and Northeast Asia and new production in China added significant production capacity, further contributing to oversupply. India became a lifeline for PP suppliers as domestic plant shutdowns created shortages. This resulted in a 35% year-on-year surge in India's PP imports. Consequently, spot allocations to China and Southeast Asia were limited as producers favored destinations offering better profits. In the PE market, a rocky recovery marked by struggling demand and supply surges has been observed, with major Middle East suppliers offering higher prices to counter price downtrends. Weak demand in the first half of 2023 is attributed to economic uncertainty and challenging margins. The region anticipates a surge in PE supply in 2023, complicating the supply-demand balance.

Despite the current oversupply condition, ICIS suggests that the market is likely to rebalance in the future, allowing for more sustainable long-term growth patterns.

"Polyolefins are the most widely used plastic in the world, and this is unlikely to change anytime soon. As consumer spending patterns evolve, the industry has to evolve along with them. Aside from the requirements for recycled materials, the polyolefins industry could see changes in technology that could allow higher-quality products to be produced at a lower cost. The use of bio-based feedstocks to produce PE/PP resins, for example, appears to be something the industry is taking note of. Growth and development would likely also focus on technology that would improve the plastic product characteristics. On the downstream side, plastic manufacturers are also looking at newer technology to produce better quality plastic products at lower costs. While a current oversupply condition is in play, the market is likely to rebalance in the future, allowing for more sustainable longer-term growth patterns to take hold," ICIS told PRA.

Furthermore, Asian polyolefin producers are intensifying their focus on sustainability. ICIS notes that major producers in Asia have been making concerted efforts to incorporate recycled polymers into their supply chains. However, these endeavors are still in their early stages in this region. While they display a commitment to the long-term sustainability of these programs, it is evident that Asia lags behind the efforts seen in Europe.

These topics, among others, will be discussed by experts and thought leaders at the 8th ICIS Asian Polyolefins Conference, offering valuable insights and networking opportunities. This year's conference is especially significant as it marks the first time it is being held in Vietnam, providing delegates with opportunities to engage with peers, gain insights into industry challenges, and explore future prospects. The event will feature discussions on key developments within the polyolefins sector in Asia, with a specific emphasis on sustainability.

“This year’s conference is momentous as it is the first time that we are holding it in Vietnam. There will be plenty of networking opportunities where delegates can engage with their existing customers and build new connections which is important given the current market climate. The industry would benefit from understanding other challenges that their peers are facing while learning about the opportunities ahead. With thought-leaders from Long Son Petrochemicals, PTTGC, Itochu Chemicals, and Stavian Chemical to name a few delivering insights, delegates will get a comprehensive view of key developments within the polyolefins space in Asia. There will also be a greater focus on sustainability with Plastic Energy talking about chemical recycling and its impact on the polymer markets and Neste sharing insight on sustainable feedstock, ” ICIS commented. 


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