APIC ‘10: Mideast ethylene expansion could hit US – consultant

13 May 2010 08:00  [Source: ICIS news]

Ras Laffan crackerMUMBAI (ICIS news)--Ethylene capacity expansion in the Middle East will continue in 2010 and all regions of the world are likely be affected, including the US, a consultant said on Thursday.

Ethylene capacity expansion in the Middle East totalled 8m tonnes/year in 2008-2009 and another 4m tonnes/year was expected to come online in 2010, said Tony Potter, CMAI's managing director for the Middle East and India.

Ethylene capacity in Asia would increase by 7m tonnes/year in 2010 and that region alone would be unable to absorb the extra production coming out of the Middle East, the consultant said.

China would add 4m tonnes/year of capacity, while 3m tonnes/year would come on stream in southeast Asia, he said.

"The resulting oversupply necessitates a significant amount of capacity rationalisation,” Potter told delegates at the Asia Petrochemical Industry Conference (APIC) 2010 in Mumbai.

That process had begun in earnest in North America and to a lesser extent in Europe and was expected to continue through the next two to three years, he added.

The world was not yet awash with ethylene derivatives from the Middle East because derivative expansion had lagged the expansion of crackers, many of which had also suffered delays, the consultant said.

"Nowhere will be immune to Middle East ethylene derivative exports,” he predicted.

Strong demand from China had played a role in helping to balance the market, Potter said, forecasting that the transition towards peak cycle conditions for global petrochemicals was expected to begin in 2013.

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By: William Lemos
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