BP suffers global collapse in demand for chems

21 October 2008 15:15  [Source: ICIS news]

By Will Beacham

 

BP suffers global collapse in chems demandLONDON (ICIS news)--The chemicals business of UK oil major BP is in the midst of a global collapse in demand for its products which is expected to last at least until the end of the year, a company executive said on Tuesday.

 

Demand was falling across the portfolio and in all the company’s key geographical regions, said Steven Welch, chief operating officer, international business refining and marketing segment.

 

The fall-off, which became more noticeable around six weeks ago, had led to zero or even negative demand growth for some products, he said at a press meeting.

 

The company was still analysing how much of the downturn was due to the global economic slowdown and how much was down to de-stocking by its customers, Welch added.

 

“In Europe and the US we’re dealing with an additional significant slowdown. This started in the middle of the year and has accelerated over the last six weeks,” he said.

 

In China, demand growth for purified terephthalic acid (PTA), of which BP was the world’s largest producer, was projected to be close to flat in the second half of the year, down from 10-11% growth in the first half, he added.

 

In Europe, demand for polyethylene terephthalate (PET), a key consumer of PTA, was expected to be flat for 2008, he added.

 

The news was also bleak for acetic acid, another important product area where the company controlled about 25% of the global market, he said.

 

“The slowdown in building, construction and home improvement use means that year on year we expect [acetic acid] demand to be somewhat negative in Europe and North America. That’s reduced real demand [not just de-stocking],” Welch said.

 

To discuss issues facing the chemicals industry visit ICIS connect


By: Will Beacham
+44 20 8652 3214



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