Global PE Operating Rates Unlikely To Exceed 85% By 2030 – Substantial Restructuring Needed, Higher Oil Prices Would Help!

Global Monthly Polymer Update

Global PE Operating Rates Unlikely To Exceed 85% By 2030 – Substantial Restructuring Needed, Higher Oil Prices Would Help!

Key Findings

• General Thoughts: The global polyethylene (PE) market reflects oversupply, and this setting appears more likely to worsen between now and year-end 2030 than improve as more capacity arrives and demand growth slows.
• Supply Chain/Commodities: We discuss the C-MACC polymer pricing service and regional PE spot price trends and provide a global capacity growth view to show the significant capacity set to arrive in NE Asia later this decade.
• Energy/Upstream: The North American and Middle Eastern cost advantages in producing ethylene (& PE) are significant relative to Asia and Europe, providing a margin buffer amid weak global prices – is it as good as it gets?
• Recycled/Renewable Polymers: We provide thoughts on mechanically recycled content growth, the content mix (virgin vs. recycled) debate surrounding compounded solutions, and high chemical recycling carbon footprints.
• Downstream/Other Chemicals: We discuss PE demand per capita in China climbing to reach levels near those in developed economies in 2024 while per capita income in China remains much closer to developing world levels.

Exhibit 1: Global virgin polyethylene (PE) operating rates will struggle to reach 80% by 2030, much less the 2000-2015 average of between 85-90%, without substantial help from restructuring actions/closures to cut supply, per our view.

Source: Bloomberg, C-MACC Analysis, September 2024

See PDF below for all charts, tables and diagrams