Chinese Plastic Makers’ Bets on Cheap US Gas Foiled by Disruptions at Panama and Suez

 

• Panama and Suez snarls add to industry’s overcapacity problem
• Profits weaken at plastics plants that depend on propane

The Chinese petrochemical sector’s bet on profiting from a steady supply of cheap US gas to make plastics is quickly going awry, as twin choke-points for shipping upend trade flows and drive up costs.

China has invested heavily in its petchems industry in recent times. But the massive expansion in capacity accelerated last year just as the Chinese economy was stuttering, slowing consumption and creating a glut of plastics across Asia. A large proportion of the new plants use propane, which is mostly imported from the US.

https://www.bloomberg.com/news/articles/2024-01-17/chinese-bets-on-cheap-us-gas-for-plastics-foiled-by-panama-and-suez-disruptions