07 May 2020
Posted in Coronavirus
COVID-19 triggers delays in projects and investment decisions in European petrochemical sector, says GlobalData
The COVID-19 outbreak has damaged supply chains and impacted labor availability across Europe, which has direct implications on upcoming petrochemical projects currently under construction/commissioning and scheduled for startup this year. Any potential delays in construction/commissioning of these plants in 2020 may spill over to 2021, and could potentially affect the scheduling for next year as well.
Dayanand Kharade, Oil and Gas Analyst at GlobalData, comments: “The pandemic has forced companies to re-evaluate their investment on new projects, which may alter final investment decision (FID) plans. Investment in new projects is expected to slow down as companies such as INEOS and LyondellBasell have announced capex cuts for 2020 in lieu of high uncertainty due to COVID-19. Other European companies are expected to follow the cue, slowing down the investment wave further.”
European petrochemical majors will be in wait-and-watch mode, as they are uncertain about further disruptions that may arise in the near future, eventually having effect on new investment plans.”
Kharade concludes: “Regional economic slowdown coupled with lower demand for single-use plastics driven by stricter regulations and increasing environmental sensitivity, is expected to hit plastics demand growth hard in 2020. Due to COVID-19 outbreak, the region’s petrochemical demand from key end-use sectors, i.e. automotive and construction have lowered. Additionally, supply disruptions and workforce shortages in these industries have elevated the challenges further.”