Geopolitical Impacts on Chemical Distribution

Europe’s chemical distribution sector is bracing for the impact of multiple geopolitical and economic challenges, including the Israel/Iran conflict. 

-          All Iran’s mono ethylene glycol (MEG), urea, ammonia and methanol facilities have been shut down 

-          For methanol this represents more than 9% of global capacity, for MEG it is 3%

-          Brent crude spiked from $65 to almost  $75/bbl, reports of attacks on gas fields and oil infrastructure

-          If Iran closes the Strait of Hormuz this will severely disrupt oil and LNG markets 

-          Expect extended period of volatility and instability in the Middle East

-          European distributors brace for a VUCA (Volatile, Uncertain, Complex, Ambiguous) world

-          Suffer prolonged period of poor demand, in tandem with producers, with no sign of an upturn

-          Global overcapacity driven by China, subsequent wave of production closures across Europe both a threat and opportunity for distributors

-          Suppliers and customers turn to distributors to help navigate impact of tariffs and geopolitical disruption
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In this ICIS Think Tank podcast, Will Beacham interviews Dorothee Arns, director general of the European Association of Chemical Distributors and Paul Hodges, chairman of New Normal Consulting.