affected by the economic recession as will PE prices and shift in line with the price of styrene monomer, its feedstock, as they did in 2023. However, as the styrene monomer price is projected to decrease, the spread between general purpose polystyrene (GPPS) and styrene monomer will trend upwards in comparison to 2023. Chemicals Market Overview in 2023 The ethanolamine (EA) market faced pressure from economic factors like other petrochemicals, leading to stunted demand, particularly in construction, which was among the main consumer of EA. On the other hand, the supply was negatively impacted by the continuous expansion of production capacity, with 0.35 million tons per year added in 2023 or 12% of the existing capacity. The average reference market price in China for EA in 2023 was US$ 989 per ton, declining US$ 220 per ton from 2022. The polyether polyols (PPG) market in 2023 saw global demand surge from 2022 by approximately 2.4% to 8.6 million tons. Demand for PPG, used in the production of polyurethane for use in downstream industries, such as automotive, construction, and household appliances, slowed down as a result of the global economic condition, prompting PPG producers with lower production costs to direct their products to India and countries in Southeast Asia. The production capacity rose 0.3 million tons per year in total. As a result of these factors, the average PPG price in 2023 was US$ 1,366 per ton, sliding US$ 290 per ton compared to 2022. Market Forecast for 2024 The EA market in 2024 will continue to a capacity expansion of approximately 0.1 million tons, or 3% of the total capacity. While the added capacity in 2024 is lower than its 2023 counterpart, as the market is relatively small and the demand growth is limited by economic factors, it will take some time for the demand to keep pace with the surge in supply between 20232024. As such, the EA price in 2024 is projected to dip slightly compared to 2023. PPG demand in 2024 is projected to face a continued slump in the first half of the year and will gradually rebound in mid to late 2024 thanks to the recovery of the economy, which will drive up the demand in the automotive, bedding, furniture, electrical appliance, and electronics industries. The demand is expected to increase by approximately 315,000 tons from 2023. On the other hand, commercial operations in China scheduled to commence in 2024 will add 130,000 million tons to the production capacity. With these factors combined, the average PPG price in 2024 is expected to increase slightly compared to 2023. Market Overview - Bio & Circularity Bioplastics and Biochemicals Market Overview in 2023 PLA demand saw a decline in 2023 due to the economic slowdown, which affected green packaging consumption in the countries of end-users and prompted some customers to cut their production output in Q1. In addition, the plastic waste management policies of certain countries, such as E.U. countries, remained unclear, causing customers to hesitate to develop bioplastic packaging. Meanwhile, in countries with clear policies supporting the use of bioplastic, such as China, the market saw rapid and steady growth, leading to significant expansion of production capacity in 2023. This resulted in intense competition and short-term price pressures, especially in products used in food packaging and food serviceware. With regard to production costs, the price of field corn, its feedstock, in the United States increased due to unfavorable weather conditions, leading to lower yields. As a result, the supply of U.S. field corn was lower than anticipated. Additionally, corn exports from Ukraine were halted in Q3, causing the price of corn, a primary feedstock, to rise. The BioPBS market in 2023 experienced a slowdown due to the economic condition, which prompted brand owners to defer their decision to adopt BioPBS. At the same time, more producers of PBS and other substitute products from China were beginning to market their products among BioPBS customers. 74
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