LONDON (ICIS)–Here are the Europe Outlook
stories for 2023 published on ICIS news in
December and January.
Global crude prices to
remain volatile
Crude oil prices are expected to remain
volatile throughout 2023, mostly driven by
economic uncertainty and political unrest, as
both issues will add pressure to fundamentals.
Europe olefins’ demand
hand-to-mouth, sustained improvements only in
H2
The lack of visibility over ethylene and
propylene market conditions in 2023 is
unprecedented, easily surpassing the financial
crisis of 2008-2009.
Europe aromatics markets
to see more painful months before slow
recovery
Difficult conditions in Europe’s aromatics
markets are expected to continue well into 2023
before they rebalance, according to market
participants, with an outlook overshadowed by
hobbled demand, cost volatility and
vulnerability to external shocks.
Europe naphtha demand to
improve, Russian sanctions to tighten
supply
The Europe naphtha market ended 2022 on a
volatile note and will remain volatile at the
start of 2023.
Europe MX to lag behind
pre-COVID-19 levels despite improved
consumption
2022 has been a rough year for mixed xylenes
(MX) in Europe mainly due to issues with
gasoline and global events impacting chemical
demand with no significant recovery prior to
pre-pandemic levels.
Europe methanol prepares
for difficult year on energy costs, weak
demand
The European methanol market is bracing for
another turbulent year with Russian sanctions
pending, while high energy costs and lower
consumer spending drive reduced demand for key
end sectors.
Europe PE, PP players
hope for uneventful year
A year of straightforward mundanity would be
very welcome for most polymer players in 2023.
INSIGHT: Regaining Europe
PET, PTA competitiveness key to
survival
The Europe polyethylene terephthalate (PET) and
upstream purified terephthalic acid (PTA)
markets have to recover their competitive edge
if they are to avoid becoming victims of
production costs.
Europe toluene demand to
start the new year slowly
Consumption in Europe has been mainly sluggish,
with no pick up expected at least for the start
of 2023.
Europe BD supply likely
constrained, but at mercy of C2, C3
Butadiene (BD) production in Europe is likely
to be constrained in 2023 as cracker
utilisation is widely expected to remain at a
low rate to offset much reduced ethylene (C2)
and propylene (C3) contractual obligations.
Europe ADA and nylon 6,6
demand could stay subdued, output curtailments
ongoing
European demand for adipic acid (ADA) and
downstream nylon 6,6 collapsed in the second
half of 2022, and is likely to remain low in
2023, as key downstream industries – automotive
and construction – faced curtailed production
due to bottlenecks in component supply, high
production costs and soft end-buyer demand.
Europe PS and EPS markets
to face further challenges in 2023, weak demand
for at least Q1
The European polystyrene (PS) and expandable
polystyrene (EPS) markets are expected to be
pressured further by weak demand and ongoing
uncertainty for 2023.
Europe biodiesel market
faces volatility, slow spot demand
The European biodiesel market is set for a
relatively stable 2023 in terms of
supply-demand fundamentals, although
uncertainty lingers over pricing volatility
amid evolving supply chain factors.
Europe IPA, MEK and MIBK
to be driven by wider economy, energy
costs
The European solvents markets for isopropanol
(IPA), methyl ethyl ketone (MEK) and methyl
isobutyl ketone (MIBK) experienced volatility
through H1 2022, largely driven by natural gas
costs and technical issues at major producers,
before softening through 2H 2022 on weak
demand.
Europe ABS and SAN
markets to remain pressured by demand
destruction
The European acrylonitrile-butadiene-styrene
(ABS) and styrene acrylonitrile (SAN) markets
are expected to continue to be significantly
pressured by weak demand.
Europe soda ash firm
fundamentals steady but 2024 could bring
another turning point
The European soda ash market is likely to stay
on a similar track in 2023 to the one it was on
in 2022, with a slight drop in demand, and
shortage turning to tightness in some
countries, while tightness turns into
balanced-to-tight conditions in others in the
coming 12 months.
European engineering
plastics set for further demand uncertainty
amid ongoing supply constraints
The European engineering plastics markets of
polyacetal (POM) and polybutylene terephthalate
(PBT) are expecting another dynamic year in
2023, with significant question marks over
demand patterns and regional production.
Ammonia market almost
impossible to predict following events of
2022
After a turbulent 2022 for the ammonia market,
the outlook for 2023 remains unclear since its
direction is so heavily influenced by
developments in the gas market, particularly in
Europe, which has become a post 24 February
2022 benchmark.
Europe oxo-alcohols
demand recovery slow amid high energy costs,
economic woes
After months of poor offtake, high uncertainty
and oversupply, European oxo-alcohols sellers
are keen to see the market rebalance in 2023.
Europe polyols market to remain under
pressure
Demand and production for the European polyols
market in the last part of 2022 was facing
difficulties, with no real signs of recovery in
2023.
Europe plasticizers
market faces rocky road with dull demand,
import pressure
The outlook is uncertain for the European
plasticizers spot market because of
macroeconomic headwinds and high production
costs.
Europe MA market could
still grow in 2023 after hard winter
European maleic anhydride (MA) players are
grinding their teeth and hoping for at best a
gradual recovery from the weakest activity in
three years.
Weak
demand, import pressure to persist in Europe
MPG market
Demand in the European mono propylene glycol
(MPG) market is expected to remain lacklustre,
especially in Q1, as macroeconomic headwinds
and pressure from Asian imports persist.
Europe etac and butac
demand to be buffeted by macroeconomic
challenges
The European ethyl acetate (etac) and butyl
acetate (butac) sectors are expected to face
continued downward price pressure early this
year, as demand from the key automotive,
construction, ink coatings and flexible
packaging industries remains weak
Europe PA could see
supply tighten in 2023
Europe’s phthalic anhydride (PA) market is
finishing the year early with most players away
for the Christmas and New Year holidays and
offices shutting down for the festive period,
but there are positive signs from downstream
markets.
Urea
prices to stabilise after volatile
2022
Global urea prices are expected to stabilise in
2023 after touching historic highs in mid-2022
due to record gas costs with prices estimated
to be lower compared to the previous year.
Economic woes to weigh on
Turkish PE/PP demand
Economic issues will continue to plague the
Turkish polyethylene (PE) and polypropylene
(PP) markets and determine the outlook for
these products in the first quarter of 2023.
Phosphates market to
focus on China in 2023
The phosphates market will start 2023 with all
eyes on China. Phosphates availability from
China remains uncertain for the first quarter
of the year. In the fourth quarter China had in
place export quotas for phosphates to ensure
domestic supply.
Jet
kerosene demand to increase on relaxed COVID-19
restrictions
The outlook for the European jet kerosene
market is optimistic for 2023, as the world
reaches almost full recovery from COVID-19
travel restrictions.
Europe capro, nylon
demand could stay low as consumer confidence
slumps
European demand for caprolactam (capro) and
nylon 6 could stay low in 2023, with automotive
offtake expected to fluctuate across the year
but remain subdued overall.
Underlying conditions for
Europe recycled polyolefins players still
volatile
The uncertainty and volatility that has plagued
recycled polyolefins markets throughout 2022 is
expected to continue into 2023, and forward
planning remains a core challenge for the
market.
European melamine Q1
demand remains weak; local production reduced
on high energy costs
European melamine market conditions are
expected to remain highly challenging for the
first half of 2023.
INSIGHT: Chemical
recycling to continue to scale up, mixed
plastic waste access remains key
challenge
2023 is likely to see continued high investment
in chemical recycling in Europe – particularly
for pyrolysis-based processes – with additional
capacity coming on stream, particularly if the
European Commission’s draft Packaging and
Packaging Waste framework revision is adopted
in to law.
Europe epoxy demand
stifled by macro woes, Asian
competition
The Europe epoxy resins demand outlook is
cautious and muted for 2023, weighed down by
ongoing macroeconomic headwinds and Asian
competition.
European EO market
worries over energy costs continue
Production cost uncertainty remains key for
European ethylene oxide (EO) market players in
2023.
Europe BPA demand faces
multiple challenges
European bisphenol A (BPA) demand is likely to
face a rocky road in 2023, weighed down by
ongoing macroeconomic headwinds and growing
Asian capacity and competition.
INSIGHT: Europe fatty
acid, alcohol markets face uncertainty, limited
demand
European fatty acids and alcohols supply is
likely to remain ample in 2023 while demand is
lacklustre.
European refinery
solvents spot market faces challenging
Q1
Europe’s refinery solvents market will face a
difficult first quarter in 2023 as recession
fears, war and the energy crisis dampen market
confidence.
Europe glycerine market
to continue to rely on imports
The glycerine market in Europe will continue to
see relatively constrained demand next year,
and imports will continue to provide supply
stability in the region.
Europe ECH demand caution
high in challenging climate
The demand outlook for Europe epichlorohydrin
(ECH) is cautious for 2023, amid ongoing
macro-economic headwinds.
Muted
European propylene glycol ethers buying
interest to carry over into Q1
The first portion of 2023 is expected to remain
challenging for sellers in the European
propylene glycol ethers (PGE) market.
Slow
demand, ample supply to carry over into 2023
for European e-series glycol ethers
Length seen in the e-series glycol ethers
market is expected to continue into the first
quarter, with some sources predicting that
demand may begin to recover in the second
quarter.
Europe R-PET to gain
traction if market conquers early
challenges
The outlook for Europe’s recycled polyethylene
terephthalate (R-PET) market can be described
as optimistic for Q2 and beyond, with some
anticipating a return to pre-pandemic
seasonality, although many uncertainties
remain.
Europe acetic acid, VAM
length in stark contrast to recent
past
Weak consumption of acetic acid and its
derivative vinyl acetate monomer (VAM) is
likely to continue into 2023 and put
significant pressure on prices that still stood
far above historical levels at the end of 2022.
Europe OX faces supply
headwinds, uncertain demand outlook
Concerns about potential episodes of supply
tightness of orthoxylene (OX) in 2023 are
growing among European players as talk about
limited imports from Asia and upcoming plant
shutdowns spread throughout the market.
Europe PX to remain long
amid capacity expansions in Asia, weak
demand
An oversupply of paraxylene (PX) in Europe
remains a concern for 2023 as new production
capacities are expected to start up in Asia.
Chlorine derivative
trends, electricity to drive European caustic
soda market
European caustic soda’s position as a
co-product of chlorine is likely to be a key
trend driver for the chemical in the coming
year, as demand for chlorine derivatives such
as polyvinyl chloride (PVC) and isocyanates is
expected to be low through the first half of
2023.
Eurozone prospects
improve but daunting long-term challenges
remain
Economic indicators released in Germany and the
wider eurozone in the past few weeks have given
petrochemicals players hope the recession will
not be as deep as feared.
INSIGHT: Global chemical
operating rates plunge to 2008/9 levels, braced
for storms ahead
The global chemical industry has cut operating
rates to levels not seen since the 2008/9
financial crisis and the outbreak of the
coronavirus pandemic in early 2020, with
shrinking demand, over-capacity and spiralling
energy costs clouding the outlook for next
year.
Financing, energy costs,
weak IPO markets to weigh on Europe chems
M&A
Chemicals merger markets are set to be buffeted
next year by the need to shore up capital
reserves in the face of a prevailing high-cost,
low-growth environment, volatile operating
conditions and inaccessible initial public
offering (IPO) markets.
INSIGHT: Poland’s PKN
Orlen reaping benefits of energy
foresight
As 2023 dawns, there will be few analysts able
to look back on the tumultuous events of the
preceding year with an air of “I told you so”.
OUTLOOK ’23: Automotive
sector hits the brakes for growth
prospects
Conditions have been challenging for the
automotive industry in recent years, and no
immediate reprieve is expected in the near term
against a backdrop of geopolitical volatility.
Europe LPG cargoes to
start weak but Russian embargo to lend
support
Muted sentiment across much of Q4 for the
propane market in Europe is expected to carry
over into 2023, as key downstream
petrochemicals markets face ongoing headwinds.
Pricing outlook murky for
global potash fertilizer market
The global muriate of potash (MOP) fertilizer
market remains in a state of unprecedented
change as 2023 dawns, following two years of
political turmoil, seemingly endless supply
stability concerns, and all-time-high prices in
some regions.
European acrylates
gripped by uncertainty
The European acrylic acid (AA) and acrylate
ester markets will be in the grip of
uncertainty for much of 2023, following a
volatile 12 months.
Europe PVC demand weak,
uncertain due to variable ECU costs
Europe’s polyvinyl chloride (PVC) market has
been through several tumultuous years since
2019, notably the coronavirus pandemic and the
Russia-Ukraine war and its impact on energy
prices.
Europe TiO2 players brace
for continued headwinds, uncertainty
Ongoing macroeconomic concerns and Chinese spot
export competition are likely to continue to
cast a shadow over European titanium dioxide
(TiO2) demand into 2023.
Europe PC demand recovery
a distant prospect
Players in the European polycarbonate (PC)
market are betting that they will have to wait
until Q2 2023 – in the best-case scenario –
before demand recovers.
Weak
European ethanolamines demand to carry over
into Q1
Many participants in the European ethanolamines
are preparing for a slow start in 2023 with few
expecting to see any notable recovery to end
user demand much before the end of Q1 to early
Q2.
NWE
paraffin wax demand to be driven by fragile,
uncertain macroeconomic climate
Pricing for all fully refined grades in the
northwest Europe (NWE) paraffin wax markets
reached its highest for 2022 at the beginning
of May, mainly due to poor availability of
product in the face of robust demand.
INSIGHT: Europe BDO
market under pressure from imports, demand
uncertainty
The European butanediol (BDO) market is
expected to remain under pressure from
cost-effective imports as well as continued
demand uncertainty in 2023.
Europe MTBE, ETBE face
upstream volatility, stable demand
The European methyl tertiary butyl ether (MTBE)
and ethyl tertiary butyl ether (ETBE) markets
are set for stable demand levels through 2023,
despite upstream uncertainty.
Europe isocyanates face
hurdles for demand recovery
After a period of low consumption in 2022 for
European toluene diisocyanate (TDI) and crude
methylene diphenyl diisocyanate (MDI), no
significant rebounds are forecast for 2023.
European MEG import
supply lower, demand uncertainty
continues
European monoethylene glycol (MEG) supply could
reduce at the start of next year as local
operating rates remain low due to unfavourable
selling conditions. Imports could also be low
because of high freight rates from the US to
Europe.
No
clear map for sulphuric acid price
direction
Amid a world in turmoil – as economies recover
from a worldwide pandemic, Russia’s invasion of
Ukraine causes energy and natural gas prices to
spike and the spectre of global food security
teeters on the edge of collapse – it is little
surprise that sulphuric acid prices have seen a
bit of a rollercoaster ride in the last year.
European SBR demand
expected to remain weak in Q1
European styrene butadiene rubber (SBR) demand
is expected to remain weak in the first quarter
of 2023 and it is currently unclear when the
situation will improve.
European base oils market
braces for impact of Russian oil products
embargo
The European base oils market is approaching a
pivotal moment for domestic production as
sanctions on Russian oil products are set to
begin in February 2023.
Europe ethanol faces
uncertain supply-demand dynamics
The European ethanol market is set for an
uncertain 2023, as various evolving supply and
demand factors will continue to shape the
market.
Europe phenol, acetone to
navigate weak demand, high costs
The outlook for H1 2023 matches the story in H2
2022 for Europe’s phenol and acetone markets –
low demand combined with high gas costs.
Europe ACN flexibility
key to cope with fragile, uncertain
conditions
The European acrylonitrile (ACN) markets are
braced for an incredibly difficult six months
ahead but players have adjusted the goal posts
and flexibility has been the biggest
requirement from both sides.
Supply and demand
questions dominate European MMA
outlook
Uncertainty around supply and demand in Europe
are the key issues facing European methyl
methacrylate (MMA) players heading into 2023.
