Global petrochemical profitability improved in Q3 - ChemSystems

02 October 2009 08:48  [Source: ICIS news]

LONDON (ICIS news)--Petrochemical industry profitability improved in the third quarter but high feedstock costs pushed many European and Asia producers towards the uncompetitive end of the cost curve, ChemSystems said late on Thursday.

“The economic performance of the petrochemical industry improved in the third quarter, after a first half of the year which had been one of the hardest periods since the early 1990’s,” the consultants said in a report summary published on its website.

Demand had increased but naphtha-based feedstock costs had risen significantly, reducing competitiveness for established players in export markets, it added.

US ethane based players moved to an improved position on the cost curve. High domestic feedstock prices pushed European and Asia players to the uncompetitive end of the curve.

“Margins meanwhile were ultimately supported by a very tight supply side, as extensive cracker outages restricted supplies of olefin feedstocks required for production of derivatives,” it said.

Demand from Asia had provided a solid base for recovery for the global petrochemical industry, ChemSystems said, but added that there were some signs of weakening in the third quarter.

“A long awaited recovery in Japan, which emerged from recession in the second quarter, after five consecutive quarters of contraction, was more than offset by a slowdown in the Chinese manufacturing sector,” it said.

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By: Nigel Davis
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