07 May 2008 15:52 [Source: ICIS news]
By John Richardson and Prema Viswanathan
SINGAPORE (ICIS news)--Anyone wandering around last month’s ChinaPlas exhibition in ?xml:namespace>
For despite all the news headlines about the global food crisis, inflation and record high crude prices, the atmosphere was optimistic.
Attendees were confident that these current global economic problems will be swiftly sorted out and, specifically in the case of
“We are quite upbeat about demand growth in
“For polyethylene (PE), we are likely to see 8-10% demand growth in 2008. Temporary damage will be caused by the ban on thin plastic bags, but this will soon be compensated for by greater demand for thicker plastic bags – equalling more PE consumption.
“For polypropylene (PP), we expect 14% growth, especially from the automotive segment.”
Similarly, Sumitomo Chemical, which with Saudi Aramco is due to start-up the PetroRabigh petrochemical complex including PE and PP production in
“Some sectors of PP are doing extremely well. We are seeing 20% demand growth in automotive segment applications for homopolymer,” said Sumitomo's China business development manager George Yang.
“For block co-polymer, growth is likely to be 10-12% as the consumer electronics and home appliances industries are slowing down a bit due to the cut in the export-tax rebates. “
He also saw a slowdown in co-polymer imports because of a big build-up of local capacity, but predicted that PP would as a whole enjoy good years in 2008-09 as a result of government efforts to boost farm incomes.
One attendee talked about a “whole different atmosphere” at this year’s ChinaPlas compared with five years ago, because of the increase in innovation.
“You walked round and saw some very sophisticated Chinese-made plastics processing machinery on sale," he said.
“This supports the success of the government initiative to push converters in the developed areas of
Jim Harris, senior vice-president at ExxonMobil, supported these views and added that he saw “improving demand for value-added polymers in
ExxonMobil was not very concerned about the ban on thin PE bags because thicker bags were more sustainable and this conformed to the company’s policy on sustainability, said Harris.
“We are increasingly focusing on products that will have greater recyclability and strength - for example, our Enable mPE and Exceed mPE.
“These are our high performance and versatile metallocene-grade products which can replace linear-low density PE/low density PE (LLDPE/LDPE) blends, enabling down-gauging by 20%.”
He added that Enable mPE - introduced in
“We expect that some 60% of the increase in global petrochemical demand over the next 10 years will occur in Asia, and
“By as soon as 2015, Asia will likely account for half of the demand for global commodity chemicals, and
SABIC, too, was bullish about both the short and long-term prospects for
“We expect demand growth for PE of around 10% in 2008 and 12% for PP,” said Abdulsalam al-Mazro, vice president for polymers.
Referring to the ban on thin PE bags, he added: “We have to be prepared to produce more environmentally friendly products in the future. It is our responsibility to protect the environment and so we are examining developing biodegradable polymers.
“We also plan to increasingly focus on bimodal PE pipe grade because of the strong demand growth.”
If not, producers argue that there are plenty of other emerging markets that could compensate for growth dipping in
India is also cited as a great cause for optimism where the growth has been startling over the past few years – again from a much lower base than China’s, though.
But all the news headlines about the global food crisis, rocketing inflation and record-high crude prices could create enough negative sentiment by themselves to set the global economy back several years.
Beyond sentiment, when organisations such as the UN are talking about millions of people in emerging markets being pushed back into poverty because of rising food prices, you have to take note.
And when Goldman Sachs - which accurately predicted that crude would rise above $100/bbl – warned on Tuesday of the possibility of $200/bbl oil in the next two years, you have to more than take note. You have to start planning for the worst.
But at the Business for the Environment Global Summit (B4E) in
Organised by the UN Environmental Programme and the UN Global Compact, more than 500 delegates attended the conference, including senior business leaders, government representatives and non-governmental organisations.
There were a lot of excellent initiatives outlined during the two-day summit which together might make a big difference.
Dow Chemical, for example, talked about recycling chlorinated chemicals in
Both IBM and Dell also talked about a new generation of computers that only include the applications that are most of use - and therefore use less power.
The problem, though, might be that no matter how energy-efficient industry becomes, the very nature of growth is causing damage to the environment that will have non-linear effects that cannot be predicted.
Take the Amazon rainforest, for instance. Nobody knows the tipping point when deforestation will lead to the forest descending into droughts and wild fires.
You can argue that deforestation is partly the result of rising aspirations and income levels – a process the chemical industry depends on for continued prosperity.
Around 20% of CO2 emissions are calculated to be caused by deforestation and so what would the loss of the Amazon mean for the environment?
What would then be the emission levels set for industry in an attempt to compensate for the loss of the forest?
What happens if
Or what happens if increasing pollution levels in
What will happen if the chemicals industry can no longer bank on millions more people in emerging markets being liberated from poverty, or moving from working class to middle class income levels, because of the food shortages and the environment?
It is surely easier to ignore what can’t be measured and assume the future will be the same as the past rather than to go to you boss and say, “hold on a minute….”
Shouldn’t of all of us be at least a little worried about what Donald Rumseld called the “unknown unknowns?”
Then again if you spent your life worrying about what might never happen how on earth would you remain focused enough to sell your next tonne of polymer?Prema Viswanathan contributed to this article
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