Chemicals: At the crunch/crossroads


The petrochemical industry is barely investing in developed countries – new crackers are now being built in feedstock advantaged developing countries and China, at an impressive rate. In future, it is likely that North America will become a net importer of most commodity chemicals and plastics. But at present the industry is still riding on an upswing that could last until mid 2009. It looks like time for industry to make hay while the sun shines, and reposition ahead of less favourable conditions (or perhaps one of the worst industry downturns in history, if some analysts
are to be believed).

This preparation is evidenced by frantic buying and selling at levels a not seen in a decade, with purchasers paying high prices to gain a position advantage.

Over the past decade, world trade in chemicals (worth an estimated €970bn) grew more than 1.6 times faster than that of global output. Almost 45% of the value of the global chemical industry is traded, and more than 35% of this trade is between companies. The worldwide chemical industry turned over an estimated €2.3 trillion in 2006, and 80% of output comes from the EU, Asia and the USA, according to the European chemicals industry association (CEFIC). Since the 1960s, the business of chemistry has become ever more global, a process that continues today and has led to multinational chemical companies.
This is a time of unprecedented global change, and the petrochemical industry is no exception. Growth for both production and sales of chemicals in China, India and the Middle East are the highest anywhere in the world. And other regions are changing rapidly, too.

According to the World Refining Association, Russia, “although economically very unstable, retains its potential”. Eastern Europe today boasts major refinery complexes such as MOL, ORLEN and Rompetrol, which have grown up over a very short time period. Latin America has also seen significant investment, with local companies such as Petrobras teaming up with the likes of US company Dow Chemical.

... to continue reading you must be subscribed

Subscribe Today

Paywall Asset Header Graphic

To access hundreds of features, subscribe today! At a time when the world is forced to go digital more than ever before just to stay connected, discover the in-depth content our subscribers receive every month by subscribing to gasworld.

Please wait...