Daily Chemical Reactions

China – The Greatest Cause of Surprise in 2023 – Same in 2024?
December 28, 2023
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Daily Chemical Reaction – Year End Summary

China – The Greatest Cause of Surprise in 2023 – Same in 2024?

Key Points

  • A year ago, we predicted China would be the most significant cause of uncertainty and risk in 2023. In the basic chemical industry and many others, this has turned out to be true – broadly too much oversupply.
  • While a lot is happening in the World, it is hard for China not to be at the top of the list of hard things to model for 2024. Industrial investment remains well ahead of local demand growth, and costs are low.
  • China has benefited from the combined effects of low-cost energy – Russian crude mainly – as well as several years of much lower inflation than the West – as local surpluses have risen, relative costs have fallen.
  • The effect on the global basic chemical market has been profound in 2023, with high-cost regions operating at depressed rates but also with local pricing that drives losses – regions with cheap gas are thriving.
  • A more significant problem, which could take center stage in 2024 is China’s dominance of clean energy, whether it is wind and solar capacity and equipment of green hydrogen and electrolyzers – China is ahead.

See PDF below for all charts, tables and diagrams

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