McKinsey - Petrochemicals in 2022

The petrochemical industry has experienced disruption and volatility over the past three years, with the COVID-19 outbreak, rising commodity prices, supply chain disruption, and geopolitical events affecting value creation. In 2022, four themes have emerged: eased supply chain constraints, regional disparities, natural gas-linked chemicals volatility, and sustainability acceleration. Despite strong demand recovery from COVID-19 and supply chain constraints driving record-high revenues and profits for petrochemical companies in 2021, profits began to return to pre-COVID-19 levels in the second half of 2022 due to easing supply chain constraints and decreased global demand for consumer goods. In Asia, prices for many chemicals were decoupled from the West due to logistical challenges in container shipping. Petrochemical companies are also experiencing increasing sustainability partnerships and commitments, particularly in recycling. Going forward, the industry must navigate the challenges of regional disparities and natural gas-linked chemicals volatility to maintain profitability and growth.