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PII (petrochemical intensity of a refinery)
What it is
The share of a refinery's output converted into petrochemical feedstock and derivatives rather than sold as transport fuel. Higher intensity means more of each barrel goes into polymers, aromatics and olefins
It is the central strategic response to peak transport-fuel demand: petrochemical consumption is expected to keep growing when petrol and diesel demand plateaus
Impact on industries
- Structurally higher and less cyclical margins than fuels, and it hedges the long-term risk of vehicle electrification eroding gasoline and diesel demand
- Refinery-petrochemical integration captures the full chain from crude to polymer, which standalone petrochemical producers buying naphtha cannot match on cost
- Enormous capital intensity and long gestation - integrated complexes take years and are being built into a global petrochemical market already facing overcapacity
- Shifts the exposure rather than removing it, since polymer prices are their own cycle and currently depressed by large Chinese and West Asian capacity additions