1. industry status: pessimism led, "bathtub" recovery into consensus
From September 22 to 25, the 59th European Petrochemical Association (EPCA) annual meeting held in Berlin, Germany, focused on releasing pessimistic signals in the European chemical industry. Marco Mensink, director general of the European Chemical Industry Council (Cefic), made it clear that the industry is in an "extremely challenging period", and this judgment is highly consistent with the reality of the current capacity changes and the long recovery cycle.
From the production capacity side, a wide range of shutdown has entered the "early warning stage"-not only inefficient production capacity exit, a number of "production life is not long" device shutdown cases, reflecting the industry is facing survival pressure has broken through the conventional cycle. More importantly, the new capacity of the Antwerp "Project No. 1" (put into operation in early 2027) will have a direct impact on the existing surplus capacity in Europe, which may accelerate the clearance of inefficient capacity and bring greater uncertainty to traders' supply and demand prediction and producer capacity planning.
In terms of recovery cycle, menxink's "bathtub" recovery (different from the "V-shaped" with rapid rebound and the "U-shaped" with short-term bottom) has become the core consensus: the industry is currently in a long period of plateau at the bottom, and recovery will not be realized until 2028 at the earliest and 2026-2027, which means that supply chain practitioners need to be prepared for long-term market fluctuations.
2. break the core: production capacity integration and policy landing dual power.
1. Capacity consolidation: a "pre-condition" for recovery"
Mencink stressed that if the European chemical industry wants to achieve a real improvement, "must first complete the capacity restructuring and integration". From the industry logic, the current overcapacity and structural supply and demand mismatch coexist-some old capacity efficiency is low, high cost, and the new project of INESS and other high-quality capacity production will further squeeze the living space, active integration (such as mergers and acquisitions, the elimination of inefficient capacity) has become the key to alleviate excess pressure, optimize the allocation of resources. For manufacturers, it is necessary to assess their capacity competitiveness in advance and participate in integration in a timely manner to avoid being eliminated by the market; for traders, there may be a regional imbalance between supply and demand during the capacity integration period, and it is necessary to strengthen the tracking of capacity change nodes (such as the start-up time of the Ionis project).
2. Policy landing: the "urgent task" of solving the crisis"
Although the EU's "Chemical Industry Action Plan" lists chemicals and automobiles, pharmaceuticals, defense, and steel as "key strategic industries", including the "right elements" supported by the industry, the lag in landing has become the biggest shortcoming. Despite the introduction of the new legislative plan, it still failed to prevent the continuous withdrawal of production capacity, and front-line practitioners are facing the dilemma of "factory shutdown and unemployment.
This issue was further focused at the side meeting of the German Chemical Industry Association (VCI) during the same period: Marcus Steileman, CEO of Covestro and chairman of the German Chemical Industry Association, explicitly called on the German government to act "faster and more forcefully" and to balance short-term problems (such as easing the pressure of capacity withdrawal) and long-term needs (such as building a sustainable industrial ecology) through "real reforms. For overseas practitioners, the efficiency of policy implementation will directly affect the stability of European chemical supply, and it is necessary to focus on the progress of EU and German policy implementation and adjust trade and supply chain strategies in a timely manner.
3. potential opportunities: downstream linkage and the "dawn" of the local market"
In the industry haze, downstream demand linkage and local market advantages constitute one of the few potential opportunities. From the demand logic, the chemical industry and the automotive, construction industry highly linked-the automotive industry boom, the recovery of the construction industry will directly drive the growth of demand for chemicals (such as plastics, coatings, adhesives), while the current industry is still affected by the impact of the new crown epidemic, the future downstream recovery will become an important driver of the industry recovery.
At the same time, the huge market of European 0.515 billion consumers, superimposed on the "structural rigid demand" of the industry (such as medical chemicals, high-end materials and other fields), provides a demand base for local chemical enterprises. The core topic of this year's EPCA annual meeting, "Which region can meet rigid demand", highlights Europe's competitive advantage on the demand side, but Mensinke also warned that "there must be no complacency"-although Europe still retains innovative competitiveness, if capacity and policy issues cannot be resolved quickly, rigid demand may flow to other regions.
It is worth noting that, in the face of the external environment of geopolitical tension, global conflict fermentation, and the intensification of internal political differences in Europe, Mensingh put forward the core idea of "local solution": the forward path of European chemical industry needs to be based on the premise of "solving local problems", which means that Europe may further strengthen the resilience of local supply chain in the future. For overseas traders, we need to pay attention to the pace of local capacity repair and demand matching in Europe, and look for entry points for cooperation.
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