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Recently, Cefic Director-General Marco Menzink said that the European chemical industry is being affected by new global political and economic fluctuations.
While these impacts bring uncertainty, they also provide exciting opportunities.
For the European chemical industry, the US-China trade friction and Brexit are the most concerned economic events in the region, and the market is also showing a wait-and-see situation.
According to ICIS reports in the past few weeks, the purchasing managers' index (PMA) in major regions of the world has declined.
In this regard, Mensink expressed his views.
He pointed out: "Before the end of this year, uncertainty in the international market is increasing and market growth is slowing.
Due to the uncertainty, some related investment decisions are being postponed.
"
US-China trade friction and Brexit are economic events of great concern in Europe.
In response to trade frictions, Mensink said that the trade war between the United States and China will lead to a reordering of global trade flows, rather than directly reducing global demand.
He believes that population growth has increased the consumption of chemicals, and the global market will continue to grow significantly, but for Europe, the global market will appear to be more fragmented.
"China will become more self-sufficient, the Middle East may supply more chemicals to Asia, and as the new polymer production capacity in the United States is put into production, polymer imports may decrease, competing with European companies in Asia and Latin America.
It will also be more intense.
In this case, Europe will have to find a way out.
”
Mensink pointed out that because the trade between regions may be reduced, for global chemical companies, the localization strategy of production becomes more important.
European chemical companies will continue to invest in China and the United States.
Regarding the possible impact of Brexit, Mensink said that he is optimistic that the EU and the UK will reach a Brexit agreement because it is in everyone’s best interest.
Cefic has also been pushing the EU and UK chemical regulations to exit the UK.
Keep in touch after Europe.
However, Mensink also said that if the United Kingdom finally retreats from the European Union without a deal, corporate tariffs and logistics management will become extremely complicated, which will change the cost structure and trade flows of European chemical companies.
Although market uncertainty causes problems, Mensink believes that the European chemical industry is also facing more opportunities.
Generally speaking, in the next 20 years, new markets in Africa, digitalization, circular economy and artificial intelligence will become new opportunities for the European chemical industry. Regarding the African market, Mensink said that for European companies, Africa has huge potential as a European chemical export market.
Mensink pointed out that, unlike other parts of the world, Africa has great potential for population growth.
He gave an example that according to forecasts, by 2050, the population of Nigeria in Africa will reach about 500 million, which is as large as the population of the entire European Union.
In addition, southern Europe is similar to Africa, and it is relatively convenient for European chemical companies to explore the African market.
In terms of circular economy and digitalization, Mensink said that Cefic is developing a mid-century strategy that focuses on the impact of digitalization and circular economy.
Circular economy involves more cooperation in different areas of the value chain, which may result in blurring the boundaries of traditional areas.
He believes that this situation has already happened.
In September of this year, the US chemical giant Dow said that it is cooperating with Tata Steel to use waste furnace gas to produce syngas and naphtha.
In addition, the circular economy will have an impact on the demand for raw chemicals, but this will be a long-term process because the number of recycled chemicals is very small compared to the entire chemical market, but it will definitely change in this direction in the future.
He pointed out that industries such as glass, metal, and paper have adapted to the business model of large-scale recycling, as is the future of the chemical industry.
In terms of digitization, Mensink believes that artificial intelligence and big data will change the production methods of the chemical industry and allow continuous improvement.
In the next 20-30 years, artificial intelligence and big data will become game-changers in the chemical industry.
Driven by the transformation of digital and circular economy, 2020-2030 may usher in a new era in the chemical industry.
Source: Sinochem New Network
While these impacts bring uncertainty, they also provide exciting opportunities.
For the European chemical industry, the US-China trade friction and Brexit are the most concerned economic events in the region, and the market is also showing a wait-and-see situation.
According to ICIS reports in the past few weeks, the purchasing managers' index (PMA) in major regions of the world has declined.
In this regard, Mensink expressed his views.
He pointed out: "Before the end of this year, uncertainty in the international market is increasing and market growth is slowing.
Due to the uncertainty, some related investment decisions are being postponed.
"
US-China trade friction and Brexit are economic events of great concern in Europe.
In response to trade frictions, Mensink said that the trade war between the United States and China will lead to a reordering of global trade flows, rather than directly reducing global demand.
He believes that population growth has increased the consumption of chemicals, and the global market will continue to grow significantly, but for Europe, the global market will appear to be more fragmented.
"China will become more self-sufficient, the Middle East may supply more chemicals to Asia, and as the new polymer production capacity in the United States is put into production, polymer imports may decrease, competing with European companies in Asia and Latin America.
It will also be more intense.
In this case, Europe will have to find a way out.
”
Mensink pointed out that because the trade between regions may be reduced, for global chemical companies, the localization strategy of production becomes more important.
European chemical companies will continue to invest in China and the United States.
Regarding the possible impact of Brexit, Mensink said that he is optimistic that the EU and the UK will reach a Brexit agreement because it is in everyone’s best interest.
Cefic has also been pushing the EU and UK chemical regulations to exit the UK.
Keep in touch after Europe.
However, Mensink also said that if the United Kingdom finally retreats from the European Union without a deal, corporate tariffs and logistics management will become extremely complicated, which will change the cost structure and trade flows of European chemical companies.
Although market uncertainty causes problems, Mensink believes that the European chemical industry is also facing more opportunities.
Generally speaking, in the next 20 years, new markets in Africa, digitalization, circular economy and artificial intelligence will become new opportunities for the European chemical industry. Regarding the African market, Mensink said that for European companies, Africa has huge potential as a European chemical export market.
Mensink pointed out that, unlike other parts of the world, Africa has great potential for population growth.
He gave an example that according to forecasts, by 2050, the population of Nigeria in Africa will reach about 500 million, which is as large as the population of the entire European Union.
In addition, southern Europe is similar to Africa, and it is relatively convenient for European chemical companies to explore the African market.
In terms of circular economy and digitalization, Mensink said that Cefic is developing a mid-century strategy that focuses on the impact of digitalization and circular economy.
Circular economy involves more cooperation in different areas of the value chain, which may result in blurring the boundaries of traditional areas.
He believes that this situation has already happened.
In September of this year, the US chemical giant Dow said that it is cooperating with Tata Steel to use waste furnace gas to produce syngas and naphtha.
In addition, the circular economy will have an impact on the demand for raw chemicals, but this will be a long-term process because the number of recycled chemicals is very small compared to the entire chemical market, but it will definitely change in this direction in the future.
He pointed out that industries such as glass, metal, and paper have adapted to the business model of large-scale recycling, as is the future of the chemical industry.
In terms of digitization, Mensink believes that artificial intelligence and big data will change the production methods of the chemical industry and allow continuous improvement.
In the next 20-30 years, artificial intelligence and big data will become game-changers in the chemical industry.
Driven by the transformation of digital and circular economy, 2020-2030 may usher in a new era in the chemical industry.
Source: Sinochem New Network
