Commodity chems may recover in 2011, peak in 2013 - Dow CEO

02 February 2010 20:21  [Source: ICIS news]

HOUSTON (ICIS news)--Commodity chemicals could stage a recovery in 2011 before peaking in 2013, Dow Chemical CEO Andrew Liveris said during an earnings conference call on Tuesday.

Liveris based the forecast on global economic growth and strained capacity in the Middle East.

"The supply side of this will be constrained coming out of the Middle East," Liveris told investors during an earnings conference call. "It has been constrained for several years. Even though there will be capacity additions, it won't come on when people think it will."

Dow is one of the best operators, and it had a relatively slow start-up for an asset in Kuwait, Liveris said. "I would tell you that you will not have as much supply coming on as people think."

At the same time, demand for polyethylene (PE) should increase along with the global economy, Liveris said. Based on a 3% growth forecast for global GDP in 2010, PE demand could grow by 4.5%.

Since current inventories are so low, PE demand could grow even quicker, he said.

"There's a case for a trough-like environment in '10 with excess capacity, a recovery in '11 and a peak environment in the '13 timeframe," Liveris said.

For more on Dow visit ICIS company intelligence
ICIS has launched weekly pricing reports in Africa for polyethylene and polypropylene. For more information contact Nadine Spoeri

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By: Al Greenwood
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