Oil Shock Hits Plastics in First Sign of Demand Destruction
- Asian plants are slashing run rates as feedstock costs rise
- Around 15% of Asian naphtha imports from Russia and nearby
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Stratospheric oil prices are flowing through into the plastics industry with producers reducing activity as profit margins collapse, a first sign of the demand destruction that may spread to other sectors.
Several Asian operators of plants that make the petrochemicals used as the building blocks for everything from children’s toys to car interiors have cut processing rates to as low as 80%, said five traders at these companies. The facilities, known as crackers, typically run at or near full capacity.