Analysts at IHS Chemical Co. said that the slowdown in capacity expansion and continued growth in demand from emerging economies headed by China should allow global petrochemical producers to enjoy peak profits in the coming years.
IGE Chemical's chief advisor (former President of the Company) Gary Bird Adams said at the Gulf Gasoline and Chemical Industry Association (GPCA) Chemical Market Outlook Symposium held in Dubai on December 13: “The basic chemicals and plastics market has been The global economic recession recovered in 2008-2009 and is growing at an average annual rate of 5.2%. The growth drivers are mainly concentrated in Asia, especially China, while the growth rates in India, Brazil and Russia are also relatively strong.â€
In the past few years, the rapid expansion of global petrochemical production capacity has suppressed the operating rate of petrochemical plants. However, the cuts in production of some high-cost producers have reduced the impact of the rapid expansion of production capacity on the market. High-cost producers, including petrochemical producers that use naphtha as feedstocks in Europe and Asia, have already cut production or even stopped work due to low profits.
Adams said that taking into account the current economic difficulties and the oversupply of the market, the sustained recovery of profitability for high-cost petrochemical producers will not occur until 2014, and for low-cost manufacturers, profitability will be Keep it. High-growth markets, especially China, will continue to absorb new petrochemical production capacity from around the world. Although China's domestic petrochemical production capacity is growing rapidly, China's import demand for petrochemical products will continue to increase.
Mark Ellermo, vice president of research and analysis at IHS Chemicals, said that the slowdown in new petrochemical capacity will enable global petrochemical producers to recover their capacity utilization and profitability in 2013. In 2011, the global ethylene production capacity was close to 126 million tons/year, and by 2016 it is expected to increase to approximately 180 million tons/year. During the period of 2006-2010, the world added 7.5 million tons of ethylene per year and 4 million tons of propylene per year, while the global production of nearly 6 million tons of ethylene per year and 3 million tons of propylene per year will increase from 2011 to 2016. Ellamo said: "Global petrochemical capacity expansion has started to slow down. As long as the economy continues to grow, we will see a gradual increase in the utilization rate of petrochemical capacity." The operating rate of global cracker will remain at 80% before 2012 The median, for high-cost producers, profitability will continue to be low, but for ethane-based producers, the profit will remain relatively strong.
Affected by the European debt crisis, the global economy is in a sluggish state, and the previously forecasted recovery in petrochemical production profits in 2012 will no longer be established. Elamo said: “The profitability of global petrochemical production will resume in 2013, and 2014-2015 will see a healthy profit level.â€
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