Fallow days loom for petrochemical firms

The petrochemical industry is entering a rough period. A building boom of massive new complexes over the past decade—particularly in the US and China—has left the sector with the greatest overabundance of production capacity in decades. Struggling to find a market for the surplus, chemical producers will see lower prices and profits. Some, particularly in Europe and East Asia, where operating costs are high, will likely rack up losses. Compounding the overcapacity problem will be a slowdown that may be an enduring fixture in the world economy as China cools from the robust growth of the past 2 decades. In addition, the industry must grapple with increased, and often costly, sustainability demands with no guarantee that its green investments will pay off. Those were takeaways from the inaugural World Chemical Forum, held last month in downtown Houston. The conference was organized by Chemical Market Analytics by OPIS, a chemical consulting