26 March 2013 16:54 [Source: ICIS news]
By Pearl Bantillo
SAN ANTONIO, Texas (ICIS)--New petrochemical capacity investments may be shifting away from Asia to the US and the Middle East, where an abundant supply of ethane – a cheaper alternative feedstock for production to naphtha – can be found, industry sources said.
At the International Petrochemical Conference (IPC) in San Antonio, some global industry players are seriously looking at building new facilities in the US, in view of the relatively recent shale gas boom, which is expected to usher in a renaissance of the petrochemical industry in the world’s biggest economy.
The same sentiment goes for the Middle East as a potential location of new capacity as the region has always enjoyed cost advantage because of its gas-based production.
In Asia, on the other hand, petrochemical production is mainly based on naphtha, the prices of which have been moving in line with crude.
At the close of trade in Asia on 26 March, open-spec naphtha for first-half May was assessed at $928-930/tonne CFR (cost and freight) Japan, according to ICIS.South Korea’s Songwon Industrial, a major producer of plastic stabilisers with Europe as its biggest market, is considering the US and the Middle East as a possible location for a new plant.
“Within five years, the commodities will be exported from the Middle East to Asia, and [from the] US to the Asian markets,” the source said.
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