18 April 2008 02:45 [Source: ICIS news]
By Prema Viswanathan
SHANGHAI (ICIS news)--Polyethylene (PE) producers not based in the Middle East may have to consider consolidating and reducing their commodity production if the market goes into a slight downturn in 2009, a senior Equate official said on Friday.
"All of us, including the Middle East producers, may have to be prepared for a shrinkage in margins next year, when surplus capacity from the Middle East heads out of the region, and the demand-supply balance tilts a little in favour of PE buyers," said Adel al-Munifi, president, Equate Marketing Co.
“Of course, it is too early to say conclusively what will happen. The high price of crude will exert upward pressure on prices, but the surplus supply from the ?xml:namespace>
However, producers which are based outside the Middle East would suffer the most in the event of a possible market downturn,as Middle East producers were at an advantage, Al-Munifi said in an interview on the sidelines of the Chinaplas exhibition.
"Middle East producers such as Equate are well positioned to weather any downward adjustment in PE pricing next year, as we continue to have a low-cost feedstock base," Al-Munifi said.
He said gas supply in
And even if the price of gas were to go up a little in some countries in the
However PE producers based in the
"Prices of raw materials like cement and steel have surged," he said.
But the company is pushing ahead with its plans to complete the expansion of its PE plant at
"We still have a cost advantage in terms of feedstocks, and will continue to export to Asia and other markets, as the
The 550,000 tonne/year PE plant at
Equate also operates an 800,000 tonne/year cracker and 400,000 tonne/year monoethylene glycol (MEG) plant at Shuaiba.
The Chinaplas exhibition started on Thursday and ends on Sunday.
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