APIC '13: Asia petrochemicals profitability remains challenged

09 May 2013 08:41  [Source: ICIS news]

TAIPEI (ICIS)--Profitability of petrochemical industry in Asia will remain challenged but integration, consolidation and cheaper coal-based feedstock could help improve it, an industry consultant said on Thursday.

“Asia will remain the epicentre of global demand growth,” said Tony Potter, vice president for Asia-Pacific at consultancy firm IHS Chemical.

However, that does not mean that it will translate into profitability, he explained to the delegates of Asia Petrochemical Industry Conference (APIC), which is being held in Taipei on 9-10 May.

Asia, with a population of 3.1bn people, accounts for 55% of the world’s potential consumers of chemicals and polymers, Potter said.

“A large and high growth industry is no guarantor of high profitability,” he added.

He said those companies that integrate production will stand to benefit more as compared with those which do not. “Integration makes the difference to cracker economics,” he added.

Similarly, coal offers feedstock advantage, although the supply of water will remain a constraint on its long-term use.

There are plans in China to build 24 coal-to-olefins (CTO) and methanol-to-olefins (MTO) facilities between 2012 and 2017. However, it is not immediately known if all of these will be completed, he said.

By: Tahir Ikram
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