Rationalisation efforts progressed in Europe and Asia, driven by overcapacity and sluggish demand growth. While European crackers maintained positive margins on average in 2024, significant closures have been announced for facilities in France, Italy, and the Netherlands. More closures are anticipated, given Europe’s high production cost and weak industrial activity. In China, Sinopec and PetroChina outlined plans to phase out smaller, uncompetitive crackers between 2025 and 2026. Asia’s ethylene margins were negative due to overcapacity and weak economic growth. Conversely, US ethane crackers thrived based on their strong feedstock advantage. In 2024, the polyethylene market faced rapid capacity expansion, shipping volatility, geopolitical tensions, rising trade barriers, and weak margins. Several facilities in Europe and Asia permanently closed due to declining demand for virgin polyethylene, stricter regulations, and unfavourable margins. Operating rates, especially in Asia, were pressured by fluctuating upstream prices and margin constraints. However, major capacity expansions, such as Sinopec’s 1.2 Mtpa polyethylene plant in China and Reliance’s 1.5 Mtpa polyethylene unit in India, helped alleviate local supply shortages. Since 2022, aromatics pricing has been impacted by above-average octane values. The first half of 2024 continued to see aromatics pricing supported by the elevated alternative value in the gasoline pool. However, as forecasted, this pressure significantly reduced at the end of the 2024 driving season. Freight disruptions have not been enough to avoid a persistent import substitution of aromatics derivatives in Europe and the Americas. China’s capacity additions pressured margins globally. China has also structurally transitioned into an exporter of the largest benzene derivative – styrene. Aggressive pricing strategies have enabled Chinese producers of derivatives, such as purified terephthalic acid (PTA), to put pressure on their counterparts around the world. Europe has been the most impacted region, where rationalisation has been unavoidable.
1,600.0 1,400.0 1,000.0 1,200.0 1,800.0
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Supply growth
Demand growth
North America Asia
Europe Latin America
Russia and Caspian Middle East
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Figure 3 2025 global oil demand and non-OPEC supply growth
Key things to watch in 2025 u Oil market
Wood Mackenzie projects 2024 to be the low point of global GDP growth, with 2025 being stronger, the economy rebalancing to growth in both services and industrial production. Global oil demand growth is projected to increase to 1.2 million b/d for 2025, with oil demand growth across all regions except Europe. However, the challenge for OPEC+ remains, as shown in “ Wood Mackenzie projects 2024 to be the low point of global GDP growth, with 2025 being stronger, the economy rebalancing to growth in both services and industrial production ” Figure 3 , as global demand growth provides limited opportunity for OPEC+ to reduce their cuts without significantly weakening the oil price. Wood Mackenzie’s current Brent oil price projection for 2025 is in the mid-to-low $70s range. Besides the typical risks to the oil price around global GDP growth, geopolitical events and conflict, the recent re-election of President Trump could present a material downside risk to the oil price. The imposition of tariffs on all US imports would dent global economic growth, add inflationary pressure to the US consumer, and slow oil demand growth, which could
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