NPRA '08: Downturn will be like 2001/02 - Crotty

30 March 2008 22:46  [Source: ICIS news]

Video interview by Nigel Davis

SAN ANTONIO, Texas (ICIS news)--Derivatives demand will militate against the impact of global ethylene and polyolefins overcapacity on Europe, INEOS Olefins CEO Tom Crotty said on Sunday.

Speaking on the sidedlines of the 33rd National Petrochemical & Refiners Association (NPRA) conference, Crotty said there were already signs of weakening in Europe’s olefins and polyolefins business and pressure on margins.

Europe will see a downturn not dissimilar to that in 2001/2002," Crotty said, as new capacities come on stream in 2008 and 2009.

However, the cyclical downturn would not be excessively deep, he said, if demand from Asia and China is maintained.

He added that he expected the industry trough to run through 2009/1011 and for it to experience an upturn in 2012/2013.

“What we are not seeing is the second wave of investment coming on the back of this,” Crotty said inferring to earlier but now cancelled project plans.

Rising engineering and contractor price pressure has led to projects beings cancelled, he added.

“We see this recession but we will come out of it in relatively short order,” the INEOS Olefins CEO added. “The investment wave has passed,” he said.

Europe will see a downturn not dissimilar to that in 2001/2002," Crotty said, as new capacities come on stream in 2008 and 2009.

However, the cyclical downturn would not be excessively deep, he said, if demand from Asia and China is maintained.

He added that he expected the industry trough to run through 2009/1011 and for it to experience an upturn in 2012/2013.

“What we are not seeing is the second wave of investment coming on the back of this,” Crotty said inferring to earlier but now cancelled project plans.

Rising engineering and contractor price pressure has led to projects beings cancelled, he added.

“We see this recession but we will come out of it in relatively short order,” the INEOS Olefins CEO added. “The investment wave has passed,” he said.


By: Nigel Davis
+44 20 8652 3214



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