Petchem downturn expected in 2009-2011–analyst

22 March 2007 01:42  [Source: ICIS news]

HOUSTON (ICIS news)--The worst of times for the global petrochemicals industry is still some two to three years away, an industry consultant said late on Wednesday.

Industry-wide earnings will remain elevated through 2007 followed by a downward correction in 2008, said Gary Adams, president of CMAI, at the company’s annual petrochemicals conference.

As the global market reverts back to surplus, trough conditions will reappear. But CMAI’s forecasts suggest the next down cycle during 2009-2011 will be significantly less severe than before.

Adams added that 2009 was likely to be a difficult year with markets set to see some dynamic changes. While demand in Asia is growing, the step-change in capacity in the Middle East would be too much for Asia to absorb.

This would lead to a competitive battle for the remaining intra-regional and international business.

To prepare for the coming downturn, companies need to broaden supply chains, enhance product differentiation capabilities, improve integration and develop a global strategy, he added.

By: Malini Hariharan
+65 6780 4359

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