INDIA AND CHINA DICTATE THE GROWTH OF

POLYMERS IN ASIA BUT IS THERE A POWER

SHIFT ON THE HORIZON?
Chinas economic slowdown and weakening downstream demand, combined with
Indias rapid demand growth is changing the dynamic of Asias polymer market.

INDIA HAS THE WORLDS HIGHEST

DEMAND PER CAPITAL GROWTH POTENTIAL

India is expected to outweigh China over the next ten years in terms of polyethylene demand growth. India will
see around 10% year on year versus Chinas 6% this could even be as low as 4% if economic factors worsen.

A DECLINE IN
IMPORTS TO

CHINA

Economic uncertainty
is continuing to
cause problems

30

The downward movement

of oil prices has affected
all commodity markets

-10

2015

2017

2019

12

Size of bubble indicates

2025 market size in million mt

12

9
71

2019

2021

2023

2025

5
India
Africa

Source: Platts

10

15

20

19
4

6%
14

25
30
35
40
PE consumption kg/capita (2014)

Asia
China
Middle East
Japan
USA
Asia (excl. China and India)
Europe
C. and S. America

WHY INDIA?

Source: Platts

4%

CURRENT POLYETHYLENE DEMAND PER CAPITA

THE MIDDLE
EAST IS ASIAS
DOMINANT SUPPLIER

The Middle East is by far the

largest supplier of polyethylene
and polypropylaene to China.
A heavy decline in demand
growth could see suppliers
seeking new markets.
As the single biggest supplier of
polyethylene to China, Iran now
has access to new markets
following the lifting of
sanctions. Could this lead to
producers looking for more
lucrative markets?

MIDDLE EAST 10 YEAR OUTLOOK PE/PP (000 mt)

40

Polyolefins production forecast

Polyolefins demand forecast

PE surplus/deficit
PP surplus/deficit

30
20

Could more Middle Eastern

exports start heading to
India? How will this affect
prices? Will the Middle
Easts margins be affected?
And will ther be competition
from other regions such as
North America?

12

Projected % CAGR (2014-2025)

Size of bubble indicates
2014 market size in million mt

10
8

19

37

14

2
0

5
India
Africa

10

15

16
3

2013

2015

2017

2019

2021

2023

2025

Source: Platts

The Middle Easts surplus is forecast to

increase over the next 10 years, resulting in
more polyethylene and polypropylene exports.

MIDDLE
EAST

11

20
25
30
35
PE consumption kg/capita (2014)

Asia
China
Middle East
USA
Japan
Asia (excl. China and India)
Europe
C. and S. America

Source: Platts

10
0

Could Middle
Eastern producers
start exporting
to India?

10%

2017

2025

47

22

2015

2023

Projected % CAGR (2014-2025)

2013

2021

FORECAST POLYETHYLENE DEMAND PER CAPITA

PE surplus/deficit
PP surplus/deficit

Demand growth for plastics

has started to slow down

2013

Source: Platts

20

-20

HAS HUGE
POTENTIAL

40

Investment in
coal-to-chemicals will
lead to more domestic
supply and reduce import
requirements further

PP surplus/deficit
PE surplus/deficit

10

CHINA 10 YEAR OUTLOOK PE/PP (000 mt)

80 Polyolefins production forecast
Polyolefins demand forecast
60

Polyolefins production forecast

Polyolefins demand forecast

20

The continued drive

for self-sufficiency
will reduce future
import requirements

Imports to China have already

started to decrease who wil
be the big winners and losers?

INDIA

INDIA 10 YEAR OUTLOOK PE/PP (000 mt)

India

65%

8kg

6%

71
mmt

China
Bullish

China
Bearish

In terms of economic development

and the use of plastics in modern
day life, India is coming from a low
base so the potential is high.
Indias per capita use is expected
to increase from 3kg per capita in
2014 to 8kg per capita in 2025.
A young population is driving
strong demand for consumer
goods, an industry heavily
dependent on plastics.

THE FUTURE LOOKS BRIGHT FOR

MIDDLE EASTERN EXPORTERS

Chinas growth may be slowing down, but it is still healthy

despite continued economic uncertainty. We forecast that China
will account for 65% of the Asian polyethylene deficit by 2025
a clear sign that a large percentage of Middle Eastern imports
will continue to head to China. However, Indias new found thirst
for polymers might tempt Middle Eastern producers to send
exports to South Asia instead.