The Ripple Effect: China’s Slowdown Creates New (& Heightened) Challenges for Local Projects & Global Markets

Daily Chemical Reaction

The Ripple Effect: China’s Slowdown Creates New (& Heightened) Challenges for Local Projects & Global Markets

Key Findings

• General Thoughts: We discuss the IMF World Economic Outlook that anticipates China’s real GDP growth to slow to almost equal global GDP growth by 2029 – a risk to local project developments and international markets.
• Supply Chain/Commodities: We highlight polymer demand growth relative to GDP during the 2010-2023 period for consideration with the IMF outlook and discuss Chlor-Vinyl market takeaways from Olin, Orbia, and Shin-Etsu.
• Energy/Upstream: Data center power demand has been a significant theme for 2024, as its prospects have exceeded most forecasts, and we discuss its development in Europe and likely consequences for power prices.
• Sustainability/Energy Transition: We discuss the South Dakota ruling impacting the Summit Carbon Solutions CO2 pipeline project, which could hold significant risk for those depending on its development for decarbonization.
• Downstream/Other Chemicals: We discuss the modest October uptick in German business confidence, marking the first uptick in five months, and why we have low confidence that this indicator marks the start of an uptrend.

Exhibit 1: China’s real GDP growth is slowing relative to World GDP growth – an increasing concern for global markets.

Source: IMF – World Economic Outlook, October 2024

See the PDF below for all charts, tables, and diagrams