Fears are rising about the risks of recession, as I discuss in a new one-page summary of the key issues facing the aromatics industry, ‘What does the future hold for Aromatics?‘. Please click here to download it.
These issues will also be key topics at next month’s 17th World Aromatics and Derivatives Conference, jointly organised with ICIS, along with detailed coverage of the benzene and xylene value chains.
We have the usual strong line-up of speakers, and the Conference will also provide an excellent opportunity to exchange views with business partners and colleagues. For further details and to book your place, please click here.
I hope to see you in Amsterdam next month.
The post Rising interest rates, volatile exchange rates, high oil prices and plastic waste challenge aromatics industry appeared first on Chemicals & The Economy.
“The reality is the US from a chemical standpoint is a very mature market. We have some demand growth domestically in the US but it’s a % or two – it’s not strong demand growth,” Pryor said, adding that polyethylene hardly grew in the US in a decade. “That is not going to change.
“The domestic market is what is it and therefore, part of these products, I would argue, most of these products will have to be exported,”
That was the view of Stephen Pryor, then President of ExxonMobil Chemical, just 2 years ago. Latest data for US ethylene production in 2015 confirms his analysis, as the chart shows:
- It has finally reached a new high, 11 years after the previous high in 2004 – but only by 2.9%
- PE also reached a new high, versus the previous high in 2007, by 7.2%
- But the other derivatives – PVC, styrene and ethylene glycol – were still below their 2004 highs
- PVC was 11.3% lower, styrene was 14.8% lower, and MEG lower by 42.1%
Now, of course, things are about to change quite dramatically, as the massive US expansions come online and start to export their product. The competition they provide will likely be extremely tough, as we discuss in our new Study with ICIS, Demand – the New Direction for Profit,
Everyone knows what happens to margins when a major battle for market share takes place. It is almost certain, for example, that the US will need to start selling some or all of its new capacity on the basis of roll-through margins back to the well-head.
And at the same time, polymer producers will also face increasing inter-polymer competition from polypropylene. Propylene’s recent price collapse is just a warning sign of what is to come, as China moves towards its target of achieving 93% self-sufficiency in the C3 value chain.
We are therefore heading towards a world where there will be Winners and Losers.
Companies urgently need to develop new outlets for their product, as we describe in the Demand Study. Such outlets do exist, in potentially large volumes in the water and food industries. But “potentially” means just that – the volume of new demand required means companies now have little time left to plan and implement the business development activity now urgently required.
Our aim in the Study is to help you go up the learning curve as quickly as possible,. If you don’t start to develop new markets today, it may well be too late tomorrow.
Next month’s World Aromatics and Derivatives Conference in Brussels has a range of top-name speakers discussing key issues for the markets.
Co-organised as always with ICIS, it features:
Shell: Global strategy manager Herbert Le Lorrain will present Shell’s new scenarios for the future, ‘Mountains and Oceans’
Bayer MaterialScience: New procurement head Christian Buhse will provide his first impressions of global benzene and toluene markets
Tullow Oil: Oil marketing manager Ben Holt will share the insights of this fast-growing company on the crude oil market
Styrolution: Global product manager Brian Torrez will outline challenges and opportunities for the styrene market
Equipolymers: Commercial Director Antonello Ciotto will describe how the PET industry is meeting new requirements from brand managers
Avestra: CEO Adam Popov will provide an overview of Russia’s phenol/acetone market developments
In addition, Andrew Horncastle of leading consultants Booz & Co will describe the impact of latest refining industry developments on the aromatics markets. Whilst Stewart Hardy of industry experts Nexant will review the outlook for the paraxylene chain.
The blog will also present two papers. ‘Life as a by-product’ will look at the benzene outlook. Whilst ‘Aromatics and Derivatives in the New Normal’ will discuss how age range and income levels will be key to future industry success.
Sponsored by Integra, the Conference has become a key event for the global industry, and provides an ideal networking opportunity. Please click here for registration, and the full agenda.