Wave of new EO plants to hit China – consultant

16 May 2013 21:12  [Source: ICIS news]

JERSEY CITY, New Jersey (ICIS)--China is building 10 ethylene oxide (EO) plants in this year alone, a consultant said on Thursday.

“EO must be used in concrete production in China – we are seeing a massive investment caused by the Chinese government saying you must use this," said Doug Rightler, president of EO&D.

He was speaking at the 3rd ICIS World Surfactants Conference.

“Forecasting for the next 30 years, the numbers for this market are momentous," he said.

“The Chinese are putting in 10 [EO] plants just this year. In Europe and the US, it takes five years. But the big uncertainty is EG [ethylene glycol]. China could grow so much, it could end up flooding its own market,” he said.

Globally, EO demand is related to GDP growth, he said. "China has still got a long way to go [in terms of growth], also India. Not to mention the African continent – the market hasn’t even kicked off there."

While Rightler spoke about China being a fast-growing region of purified EO, he was concerned that no investments were being made for pure EO in the US.

“Pure EO producers are running at 90% of capacity and it [the EO market] will get tighter and tighter. EO prices in the US are rising regardless of the price of ethylene," he said.

Prices are rising even though the US has become the most cost-competitive region in terms feedstock since the evolution of shale gas, he said.

“The Middle East is running out of cheap ethane, and they won’t be coming here [the US] anymore. China is where everything it's at – the rest of the world has stopped.”

The ICIS World Surfactants Conference continues through Friday in Jersey City.

By: Julia Meehan
+44 20 8652 3214

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