InterviewAFPM ’12: BASF eyes 'good year' for NA industrial petchems

02 April 2012 23:46  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--BASF is looking at another “good year” for its industrial petrochemical operations in North America in 2012, a company official said on Monday.

“If you look at demand, most of our markets are growing at GDP rates,” said Brian Lieberman, BASF vice president for industrial petrochemicals in North America, in an interview on the sidelines of the International Petrochemical Conference (IPC).

Industrial petrochemicals include coatings and superabsorbent polymers.

“As I talked with our customers here, I wouldn’t say that demand is weak. They are optimistic, but just a little bit cautious,” he said.

Economic conditions in the US are improving, with recent data showing increases in personal consumption and consumer spending.

“So far, business has been good… People are a little slow to build inventory levels because they are not exactly sure where demand is gonna go,” Lieberman said.

In the first months of the year, however, the BASF official said margins for industrial chemicals at the start of the year “have been somewhat compromised due to the high propylene cost, especially in February and March”.

He said the propylene market is expected to remain challenging in the next few months due to a spate of cracker turnarounds in North America.

With propylene prices remaining volatile, downstream petrochemical firms are having difficulty passing the cost through to its consumers.

Lieberman considers the “changing conditions with shale gas” as the biggest challenge for North America’s petrochemical industry, citing possible impacts on alternative technologies.

“There are certain molecules that will be more challenged. It will open up opportunities for alternative routes to propylene,” he said.

As more and more crackers in the region use lighter natural gas-based feedstocks compared with naphtha, their ability to produce propylene is significantly reduced, hence the tight supply of the olefin in North America.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.

By: Pearl Bantillo
+65 6780 4359

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