SCGC Acquisition and Expansion Strategy
What happened in Q4/22: intense inventory destocking throughout the supply chain
Prices continued to decline and spreads sank.
2022 Market Prices ($/ton)
1,500
1,400
1,300
1,200
Q4 Prices
1,100
1,000
900
800
938
Insights into Q4/22
Off-season with unusually weak demand
PE
Non-durable
consumer goods
1
PP
Durable goods
1,060
1,040
1,005
745
700
Jan
Feb Mar Apr May Jun
Jul
Aug Sep
Oct Nov Dec Jan
2023
HDPE
PP
PVC
Butadiene
Benzene
820
PVC Building materials
P.13
• Global economic concerns from inflations and
rapid interest rate hikes, weighing on real incomes
Surge in COVID-19 cases in China, slowing economy
• Similar to PE, plus the existing pause to the
household big ticket purchases, following the
large US government stimulus cheque spending
• Similar to PE, plus China's ongoing property downturn
Continued inflow of significant capacity additions
>30% of total ethylene capacity additions in 2022 came online in Q4/22,
mainly from Asia and North America
What we have been seeing: increased level of supply rationalization
•
More turndowns and lower operating rate across the industry
Note: Jan 2023 prices are as 23 January 2023.
SCGC SCGView entire presentation