Polymer v GDP.pngThe blog was in Vienna this week for a World Refining Association conference on the Global Petrochemical outlook. It had the privilege of chairing a very distinguished panel of industry leaders in a discussion about managing through the downturn.
One of the key inputs came from Anton de Vries, LyondellBasell SVP, who had earlier shown the above slide illustrating the close relationship between polyolefins demand and GDP/capita. The vertical axis shows consumption of polyolefins/capita, and the horizontal axis GDP/capita. It highlights a number of key factors:
• The developed Regions (eg EU, USA, Japan) have GDP/capita of over $40k, and use over 40kg/capita of polyolefin.
• Emerging countries (China, India) have GDP/capita of less than $5k, and use only c10kg/capita.
• Total demand (the size of the circle) in emerging countries is therefore much less than in the developed world, even though they have much larger populations.
The blog has added a trendline to the chart, in order to highlight the relatively gradual way in which higher GDP/capita leads to higher polyolefin consumption. As Anton noted, the emerging countries can expect to see major increases in demand as their populations become richer. But it will probably take decades for them to reach the current level of per capita demand in developed economies.