What is the outlook for the global economy over the next few years? Are we likely to see a continuation of the 2003-7 Global Boom (the purple line)? Will growth reduce to the average level seen between 1980-2000 (the green line)? Or are we at the start of a multi-year Global Downturn (the red line)? This is a key question for the petrochemical industry, with its own growth dependent on increasing GDP/capita.
We have just published a major new Study, 'Feedstocks for Profit', that provides a completely fresh and integrated view of the key issues facing the industry, under these 3 potential Scenarios. It focuses on the main 'building blocks' (ethylene, propylene, butadiene, benzene and paraxylene) and their derivatives. It concludes that the industry is about to go through a period of increasing change, which will make decision-making more complex. This will create major challenges for producers and consumers:
• Change. The world economy may well be slowing down, after the recent boom period. At the same time, new petchem capacity in the Middle East and China is about to come onstream, whilst the US is increasing its refining capacity and gasoline production.
• Complexity. Markets are becoming more volatile. Competition is likely to increase within the main regions, as exporters find life much more difficult. Inter-polymer competition will also become more intense, as supply is increased by new capacity.
• Challenges. These developments create significant challenges. Integration (either physical or virtual), will be the critical success factor for the future. This will provide companies with the increased flexibility they will need to maximise their profits, at a time of increasing change and complexity.
A copy of this week's ICIS Chemical Business feature on the Study is available by clicking here ICB Aug08.pdf">, if you would like to read more about our Conclusions.