By Malini Hariharan
On a day when Asian stock markets tumbled on fresh worries about Europe's debt problems and a wider economic slowdown, it was not surprising to read about the downbeat mood at this year's European Petrochemical Association's (EPCA) meeting in Berlin.
Reports by the blog's colleagues on ICIS news indicate that economic concerns and its impact on demand were a common element across many petrochemical markets.
In acrylonitrile, one trader described the current European market as "one of the worst periods for producers as they keep losing volume and money". Offtake from the ABS sector has been low as there is lack of clarity on when things will pick up in the current economic climate.
The views were echoed in a nervous polyoelfins market where players were hoping for stability despite falling prices in Asia.
Producers and consumers across the phenol chain said economic uncertainty was making it almost impossible to predict volumes and prices for 2012.
"Asia is weak and Europe is swimming in phenol, in fact producers are having difficulty getting rid of it," said one buyer.
The ethanolamines market was characterised by an over cautious atmosphere with customer purchasing the bare minimum leading to concerns this could turn into a self-fulfilling prophecy.
"If players stop buying, anticipating a decrease, it will come," said one ethanolamines producer on the sidelines of EPCA meeting.
The president of Huntsman's performance products division, which includes agrochemicals, coatings and polymers including epoxy curatives, cosmetic items and polyurethanes (PU), acknowledged that demand growth was slowing down.
"The customers all have apprehension about what is going to happen through the balance of the year and when it [the economy] is predicted to come back.
"I think everybody is recognising that it is going to be weak through the balance of the year," he said.
But others were more optimistic and played down the current market turmoil.
Tom Crotty, INEOS board director, was of the opinion that the slowdown in demand and fall in margins over the last few months was a "fairly natural adjustment" to mid-cycle conditions.
"Basic demand is pretty steady," driven by major western economies that have recovered following the 2008-2009 crisis and are "just ticking over", said Crotty.
Current petrochemicals demand is more solidly based, he said, adding: "I think 2012 will be a pretty good year".
A senior executive at Eni's monomers, aromatics and intermediates division was positive that were no elements to point to a crash but companies preferred to remain cautious.
Companies are wary of being left with too-high inventories at the year-end, he added. "What is missing is the visibility for the next part of the year."
He was optimistic that there would be less product in petrochemical supply chains at the start of 2012 when demand would be at a "more normal level".
Its good to meet challenging times with optimism but expecting demand to return to 'normal' in just a few months may be stretching things too far.