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No European petchem import growth in 2020 due to COVID-19 slowdown

09 April 2020

European Bulk Chemical Supply – Demand
Overall net imports may remain flat from 2019

With increasing swaths of the European economy under lockdown, chemical imports are likely to stagnate in 2020. If utilization rates in the regional petrochemical supply chain decline from 80% to 60%, then the aggregate chemical shortfall is likely to remain unchanged at roughly 5 million mt (see above), and there is no need for Europe to boost its imports. Expectations of a rise in the regional methanol deficit for 2020 have been scaled back, according to Methanol Market Services Asia. Shortages in SM and benzene are also likely to shrink on reduced downstream demand. European tyre makers are halting or slowing production due to the shutdown of the automotive sector. Demand for tyres fell around 10% YoY as COVID-19 reduced consumption, reported Platts. Offsetting reduced demand in other sectors could be increased imports of MEG on the back of two PET plant start-ups in Russia with a combined capacity of 700kt/yr. Stagnating shipments to Europe, against a backdrop of lower bunker costs, may increase downward pressure on ME Gulf westbound freight rates.

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