APIC '10: Polymer industry optimism begins to cool - consultant

13 May 2010 11:40  [Source: ICIS news]

MUMBAI (ICIS news)--Optimism in the polymer industry is fading, a consultant said on Thursday, citing uncertainties as to how increased ethylene and derivative capacity in the Middle East will impact the market.

The industry seemed less upbeat since the National Petrochemical & Refiners Association (NPRA) conference in March and it would likely be worse at the Latin American Petrochemical Association (APLA), the source noted, referring to the last and next major meetings for the petrochemicals sector.

APLA will be held in November in Rio de Janeiro, Brazil, while NPRA was held in San Antonio, Texas, at the end of March.

According to the consultant, start-up delays in the Middle East are being overcome and new capacity is poised to enter the market in the next few months.

The brunt of the impact would be felt in 2011, the source added, predicting that supply pressure would lead to rationalisation and a more competitive market; one in which Middle Eastern producers may begin competing against each other.

“The Middle East could go from price follower to price setter,” the consultant said on the sidelines of  the 2010 Asia Petrochemical Industry Conference (APIC) in Mumbai.

This could result in a significant transformation in the industry, the source said, adding that the impact would continue through 2012 and a recovery would not begin until 2013.

Ethylene capacity in the Middle-East increased by 8m tonnes/year in 2008-2009 and another 4m tonnes/year of capacity is expected to come on stream in 2010, according to industry projections.

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By: William Lemos
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