Market and product

Global chemical trade flows appear to be pivoting toward emerging Asia as European market fades, while the Middle East solidifies its role as a key export hub.

• Europe to shift to net importer from net exporter long-term

• Asia export growth continues to grow despite US tariffs

• Middle East poised to be energy and petrochemicals export hub with fewer headwinds

Industry executives at the recently concluded19th Gulf Petrochemicals and Chemicals Association (GPCA) Forum in Manama, Bahrain underscored the need for adaptability in an increasingly volatile world.

Building partnerships would be critical in shaping the future of the global petrochemical industry, which is currently grappling with oversupply and weak demand, coupled with a high degree of uncertainty wrought by geopolitical tensions and US tariffs.

EUROPE IN DECLINE

German chemical trader HELM AG chairman Stephan Schnabe said that in Europe, “the amount of people who are creating income is getting less and less, and the ones who are available are spending the money (elsewhere)… this is impacting the consumption.”

This will, hence, impact chemical demand in Europe, which gives other markets like China, a producer with massive capacity excess, export access, he said.

“In the long term, Europe will likely shift from being a net exporter to becoming a net importer,” said Udo Lange, CEO of Danish chemicals shipping and terminal firm Stolt-Nielsen.

“Capex [capital expenditure] investments moved out of Europe, and actually, you’re shutting down plants in Europe, and the investments are outside of Europe, and they’re not going to come back anytime soon.”

Just one chemical plant is starting up in 2026 in the EU, that being INEOS’ new 1.5 million tonne/year ethylene cracker in Antwerp, Belgium, to be commissioned in 2026.

“Europe is going to become more of a specialty producer and is totally going to be away from basic chemicals,” Lange added.

ASIA, MIDDLE EAST EMERGING AS GROWTH REGIONS

India is emerging as a large player in chemicals manufacturing and demand and showing accelerating growth, fueled by domestic manufacturing and exports.

Meanwhile, southeast Asian economies including Indonesia, Thailand, Vietnam and Malaysia, continue to scale up manufacturing in their “China+1 strategy” amid US tariffs and increasing chemical demand for both domestic use and exports, fueling GDP growth.

Brazil as well is becoming a “powerhouse” for energy transition, Lange said, while the Middle East is an energy/petrohemicals export hub poised for further growth with fewer headwinds than other regions.

“The [Middle East] is leading the relocation of production assets from consumer countries to areas with access to raw materials, positioning it as one of the “big three” centers of supply, alongside the US, the Middle East and China, said Ignacio Torras, president and CEO of US-based chemicals trader Tricon Energy.

While Europe’s production of basic chemicals wanes, the Middle East is poised to continue being a “humongous player” in the market, he said.

On the other hand, the US remains competitive owing to its favorable feedstock advantage, supporting continuous production growth, while protectionist policies from the government favors US companies, Torras added.

Insight article by Jonathan Yee.