News Information

From May 15th to 16th, the Asia Petrochemical Industry Conference (APIC) was held in Bangkok, the capital of Thailand, delving deeply into the challenges and opportunities faced by the petrochemical industry in the current environment. At present, the petrochemical industry in Asia is in deep trouble and the road ahead is full of difficulties and obstacles. Participants at the meeting generally believed that the continuous oversupply and the global economic downturn caused by US tariffs have become the two major "obstacles" to the development of the industry. Meanwhile, global major trends such as geopolitics, energy transition and sustainability are profoundly reshaping the demand patterns and industry landscape of petrochemical products.

Alexander Lidebak, vice president of ICIS Chemical Analysis, pointed out that oversupply, cost fluctuations and regulatory changes pose major challenges for the petrochemical industry. Under the circumstances of persistently weak demand, chemical enterprises around the world have taken measures to close factories one after another, with Europe being particularly notable. Lidebak warned that if large-scale factory shutdowns are not carried out, the situation of oversupply of polyolefins may persist until the mid-2030s, forcing many chemical enterprises into a survival predicament. He also predicted that the petrochemical industry would need to go through a more difficult period before it could see a turning point, and 2027 to 2028 might be a potential turning point.

John Richardson, a senior advisor at ICIS, further pointed out that the underestimation of new petrochemical capacity in Asia is also an important factor contributing to the oversupply in the global market. At present, the global polyolefin production capacity has far exceeded the actual demand, further intensifying the competitive pressure and development predicament of the industry.

Despite numerous challenges, the Asian petrochemical industry still has development opportunities in difficult situations. Bala Ramani, Director of ICIS 'Sustainable Development Consulting and Asia Strategy Advisor, said that adjusting through plastic recycling and innovation might be an effective way for chemical enterprises to survive in difficult situations. Under the current situation of declining demand, chemical enterprises must actively adapt to the constantly changing market conditions. Exploring the recycling of plastics and alternative raw materials has become a key direction.

The development of sustainable polyolefin business represents a new opportunity for chemical enterprises, especially for integrated polyolefin producers, as it can fully utilize existing assets to create more value. By adopting diversified production models, the polyolefin industry can not only reduce its environmental impact but also meet increasingly strict regulatory requirements and open up new value chains in resource-limited environments.

The main ways to achieve the recycling of polyolefins include mechanical recovery, pyrolysis reuse, and production using bio-based naphtha or other hydrogenated bio-derived oils. Among them, pyrolysis is expected to become an important supplement to solving the problem of plastic pollution in addition to mechanical recycling. Polyolefin producers can also fully tap into the value of pyrolysis oil integration by strategically adjusting raw material procurement, technology and process configuration.

However, Asia lags significantly behind Europe in the development of sustainable polyolefins. Europe is at the forefront in this field, with the goal of achieving over 13 million tons of sustainable polyolefin production by 2040. In Asia, although markets such as India, Japan and South Korea have shown interest in sustainable polyolefins, fragmented policies have become an obstacle to development. Ramani said that the early attempts of a few markets in Asia and global brands, as well as the constantly evolving yet fragmented policies, have brought certain impetus and opportunities. However, future market growth still depends on the coordination and unification of regulation as well as the improvement and development of infrastructure. Compared with the strict and uniform regulatory requirements of the European Union, the decentralized regulation among Asian countries makes it difficult for the sustainable polyolefin market to expand in scale. However, South Korea and Japan are actively creating conditions for sustainable polyolefin demand. Although investment in Asia may initially target developed markets such as the European Union, in the long run, the focus of investment will gradually shift to local and regional markets. Predictions show that if Asia adopts the EU's recycling content target, the region could release over 18 million tons of sustainable polyolefin demand by 2040.

However, it should be noted that the wide application of alternative raw materials and sustainable polyolefins still faces many obstacles, including regulatory uncertainties, high costs, technical scalability issues, and insufficient infrastructure. Ramani emphasized that against the backdrop of the industry's ongoing challenges, sustainable polyolefins are expected to enhance the resilience of the entire industry by improving resource efficiency, meeting regulatory compliance requirements, and creating new value through circular production models.