McKinsey – Petrochemicals review, May 2024

The petrochemical industry in 2024 has seen softening demand, increased capacity, low earnings, and slowing growth in circularity. However, there is expected to be moderate improvement by the end of the year. 2023 was marked by fluctuating trends post-COVID-19, with challenges such as global economic weakness and destocking affecting demand growth. The industry faced lower end-market demand and surplus capacity. Despite ongoing challenges, there is optimism for 2024 as some sectors, like light vehicle production, remained strong in 2023. Overall, conditions may be in place for a more typical recovery cycle, with forecasts showing demand growing to match existing capacity in some chains. The key themes shaping the industry’s current situation include weakened GDP growth, destocking, and elevated inventory levels in end-market sectors. Despite these challenges, there is optimism for the industry's recovery in the near term.