Issue 3/2019 - Global Chemicals Quick Facts

Global Chemicals Quick Review

U.
S.
PE exports to Southeast Asia and Africa have increased significantly

According to the latest data from the U.
S.
International Trade Commission (USITC) compiled by Accenture, U.
S.
exports of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) to China fell by 55%
year-on-year from July to October 2018 due to the impact of mutual tariffs imposed by the United States and China.
However, U.
S.
exports of polyethylene (PE) products to regions such as Vietnam, Malaysia, Indonesia and Africa increased significantly year-on-year, especially Vietnam
.
In October 2018, compared with July, U.
S.
PE exports to Southeast Asian countries such as Vietnam, Malaysia, Singapore and Indonesia increased by 78,000 tons, or 238%, and PE exports to Africa increased by 17,000 tons, or 153%.

Market participants expect U.
S.
PE exports to Southeast Asia and Africa to continue to grow
in 2019.

The U.
S.
government shutdown affects the U.
S.
and EU chemical industries

Jefferies Group, an investment bank, said a week-long U.
S.
government shutdown would lead to a decline in GDP growth in the country this quarter, while also affecting the chemical industry
in the United States and the European Union 。 Lawrence Alexander, an analyst at Jefferies, said that a one-week shutdown of the US government will reduce the annual GDP growth rate of the United States by 5 basis points; If the ripple effects, direct and indirect effects are taken into account, each month of U.
S.
government shutdown will have a 0.
11% impact on sales revenue in the US and EU chemical industry, 0.
21% on EBITDA and 0.
9% on
free cash flow in 2019.

Consumer preferences are forcing detergent manufacturers to adjust their formulations

IHS Markit's latest research report states that manufacturers of cleaning products expect reasonable market growth in 2019; In 2022, the global demand for soaps, detergents and cosmetics will continue to grow at an average annual rate of 3.
5%, of which China's average annual growth rate is 7%~7.
5%, which is significantly higher than the average annual growth rate
of 3.
5%~5.
0% in other emerging markets.
Changing consumer demands are driving new chemistries for better-performing, more sustainable products
.
The generation born between 1981 and 1996 is now a group
that detergent suppliers attach great importance to.
This generation favors brands
that contain natural ingredients or environmental claims.
This allows brand manufacturers to continuously innovate to use more natural ingredients and re-categorize
products based on product function and channel.
Jon Moeller, chief financial officer of Procter &G Inc.
(P&G), said: "Consumer preferences are changing and creating new, fast-growing segments and formats
.
”

International petrochemical giants have pledged to invest in reducing plastic waste

A group of nearly 30 producers of plastics and consumer goods said they had pledged $1 billion to help reduce plastic waste
.
The group, Alliance to End Plastic Waste, includes oil and gas giants such as ExxonMobil and Shell, as well as chemical producers
such as BASF.
The organization hopes to invest $1.
5 billion over the next five years
.
In addition, the organization plans to work with cities to design waste management systems, especially for rivers
that allow waste to flow into the ocean.
Member companies will also promote the development of technologies to reduce plastic waste by investing in start-ups, with an initial focus on Southeast Asia
.