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Petrochemical demand in 2021 supported by low inventories, broader economy

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Demand in 2021 for plastic resins including polyvinyl chloride and polyethylene may see support from low inventories in the first months and from a broader economy reopening later in the year as immunization efforts increase, paving the way for a rise in durables consumption.

Top officials from companies including Westlake Chemical and LyondellBasell recently shared their outlook for PVC and PE demand and prices in 2021.

As for profit margins, one Braskem official said they may not be as favorable as they were in 2020 for the Brazil-based company that is also the biggest polypropylene producer in the United States.

A top official at the world’s top methanol producer, Vancouver-based Methanex, said that the pandemic-related developments are uncertain and could lead to different scenarios, including more weakness ahead. There is a need to maintain financial flexibility and liquidity, he said.

In the second part of 2020 there were gains “to reflect the PVC raw material price increases. And with a strong demand even into the winter season, we’ll see that prices will be maintained,” said Albert Chao, Westlake Chemical’s CEO.

“Typically spring time is a strong building season,” he said. And because of this, there could be inventory building to prepare for the increased activity in the spring. For later in the year he anticipated demand support as a result of a low interest rate combined with monetary and fiscal stimulus related to COVID-19.

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