Global authorities predict the era of supply and demand rebalancing is coming as the chemical industry faces a wave of capacity shutdowns

AnxunshiICISIn the energy and chemical industry, it is a global leading commodity market information service provider, known as highly specialized.“Market Intelligence Agency”。

The agency's recent analysis suggests that if the announced shutdown plans worldwide are implemented as scheduled.

The supply and demand structure of the global chemical market will undergo significant changes, and the global supply-demand balance may enter a state of long-term tightening.

Global consulting company, Erlanbik (AlembicIt is a professional equity research company in the global financial investment industry.

Hassan Ahmed, an analyst at the global consulting company, conducted research on the global chemical industry with ICIS.ICISThe conclusion is basically consistent with the above content.

Ahmed's analysis suggests that after three consecutive years of declining profits, the global chemical industry shows signs of fatigue.

If the permanent capacity shutdown plans initiated by multinational companies are fully implemented, the global chemical capacity utilization rate will be as early as2028The year reached its peak, marking the entry of the global chemical market into a new phase once again.

The structural adjustment of the chemical industry is accelerating.

Over the past three years, the global energy price fluctuations, geopolitical contributions, and slowing demand growth have collectively compressed the profit margins of enterprises, forcing the chemical industry to reassess its capacity layout.

According to public information,2025-2028The announced plans for global ethylene capacity shutdowns this year amount to as much as780 /

Among them, South Korea alone plans to shut down.270 -370 /Ethylene production capacity of the year.

According to the announced project plan, there are approximately1050 /The planned new capacity for the year has risks of project delays or cancellations.

The combination of existing capacity withdrawal and the uncertainty of new capacity additions has further reinforced the expectation of tightened supply.

China's ethylene production capacity is facing tremendous transformation pressure.

China is a key market in the global chemical industry, and any changes in production capacity have far-reaching impacts.

Ahmed specifically pointed out that China has4A set of cracking units relying on ethane imports from the United States, with a total capacity of370 /The year, due to the long-term impact of extremely high tariffs between China and the United States, there is a significant risk of closure.

1100 /The annual mixed feedstock ethylene capacity will be reduced if the supply of propane is interrupted and naphtha is used as the feedstock instead.170 10,000 tons.

China is currently advancing policies for the optimization and integration of outdated production capacity, which may lead to610 /The phasing out of old small-scale installations will also exacerbate future global supply pressures.

If all plans are implemented, the supply and demand structure will inevitably be reshaped.

If all the aforementioned shutdown plans are truly implemented, the total will be2980 / 2024-2029The global ethylene production capacity's compound annual growth rate has decreased to0.8%。

What is the earliest that the global ethylene capacity utilization rate will be?2028Year breakthrough to90%Above, the market will also enter an era of tight balance.

By then, the global supply and demand structure will have been reshaped, and the major adjustments in the industry structure will yield results.

In terms of corporate strategy, it is also necessary to actively respond.

In the short term, the anticipated capacity adjustments have already affected the financial status of the company.

Ahmed therefore downgraded companies such as Dow Chemical, LyondellBasell, and Westlake Chemical.2025-2026The expected profit for the year.

To better respond to changes, companies are accelerating strategic transformation, with the most important aspect being the increased investment in high value-added products, followed by the strategy of capacity regional transfer to optimize global layout.

In terms of global capacity transfer, the Middle East and Southeast Asia are popular choices for major chemical companies.

The global energy and chemical market is indeed at its most critical turning point.

Shutting down capacity and tightening supply and demand will become the norm in the future, and it is also an important opportunity for industrial upgrading.

Future innovation is not just about product innovation; it requires collaborative innovation across the entire industry chain. This development model is more resilient and sustainable.

Friends in the industry, how much uncertainty do you think is involved in these so-called professional predictions mentioned above?