ICIS - chemical podcasts Episode 1414: Think Tank: Signs of more protectionist approach as global chemicals slide towards a 2028 trough, Europe and Asia fight for survival
Dec 12, 2025
In this episode, James Wilson, an ICIS analyst focused on global chemical market forecasts, Tom Brown, Insight Editor and European chemicals commentator, and Paul Hodges, Chairman of New Normal Consulting, explore the increasing protectionism in Europe as the chemical industry anticipates a significant downturn by 2028. They discuss the urgent need for capacity closures to balance oversupply, particularly in ethylene and propylene, and the implications of China's rapid production growth on global markets. The geopolitical landscape and potential trade barriers emerge as critical factors in shaping the future of the industry.
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Oversupply Peak And Trough Timing
- Global oversupply in ethylene and propylene will persist through the late 2020s with a peak of capacity additions in 2027.
- James Wilson expects a cycle bottom around 2028, possibly slipping to 2029 if projects delay.
China Dominates Recent Capacity Build
- Nearly 75% of global capacity additions for key monomers since 2020 have been in China, accelerating the global imbalance.
- China projects can reach on-spec production very quickly, raising the risk of more near-term additions.
Scale Of Closures Required
- To restore historical low operating rates, about 24Mt of ethylene and 26Mt of propylene capacity must exit the market.
- Those closure amounts equal the current demand or capacity of Europe, the former USSR and Africa combined.