06 October 2011 17:25 [Source: ICIS news]
LONDON (ICIS)--Nexant’s petrochemical and polymer margin index for Europe dropped by more than 40% in the third quarter from the first-half average as demand stalled, the consulting firm said on Thursday.
“The third quarter saw a dramatic change in fortunes for European petrochemical producers, with average profitability across the industry collapsing to its lowest since the global financial crisis took hold,” Nexant said.
“Supplies of olefins lengthened as most crackers operated reliably, ending a period of tightness in the first half of the year. Modest relief in feedstock costs ultimately proved little comfort to producers who had to surrender margins as market sentiment changed sharply.”
Global petrochemicals market sentiment “deteriorated dramatically” in the third quarter as fears of a ‘double-dip’ recession hung over the market, Nexant added.
“Consumption of petrochemicals was blighted as consumers and manufacturers suffered a severe loss of confidence in the outlook for the global economy,” it said. It added that still soft Asia demand failed to counter fragile demand in the west.
Nexant’s Middle East petrochemical cash margin index fell back by just 1% percent from its first-half average, however.
Margins on olefins and polyolefins delivered into the European market decreased as confidence in eurozone economies deteriorated, but margins on exports to Asia increased slightly on tight supplies.
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