Outlook for the global aromatics industry – insights from senior executives at Amsterdam Conference

Economic growth

SHARE THIS STORY

Ben, PTA Aug15Aromatics markets often lead petrochemical markets, and provide good insight into economic trends.  This has certainly been true of PTA (terephthalic acid) and benzene over the past year.

PTA demand into polyester and PET is dominated by Asia: benzene’s wide variety of uses means it is a good proxy for industrial production in Europe.  Recent developments have been very significant, as the chart highlights.

It shows the spread (difference) between benzene and naphtha in Europe (green line); and between PTA and naphtha in Asia (red).  Naphtha is the oil-based feedstock for both products, and so the spread is the key measure for profitability:

  • PTA spreads collapsed in H2 2008 due to the financial crisis, but then rallied to $650/t with China’s stimulus
  • They then began a steady decline in H2 2013 as China introduced its New Normal policies
  • They fell to zero in H1 2014, but have since managed to stabilise around $200/t
  • Benzene spreads showed the same decline in H2 2008, but their rally was more volatile up to 2012
  • Spreads actually went negative for a period in early 2009, and returned to this level in late 2011, having been as high as $500/t
  • They then moved into the $300/t – $600/t range until a year ago, before declining and then rallying recently

Both products are thus highlighting underlying weakness in the global economy, with PTA also acting as an important leading indicator for the Asian economy.

How should companies and investors react to these developments?  Should they sit tight, and wait for the storm to pass?  Or should they develop new strategies to deal with a more difficult environment?

These are some of the key questions that will be debated at our 14th annual World Aromatics & Derivatives Conference in Amsterdam on 17 – 18 November.  Co-organised as always with ICIS, we will benefit from the insight of key executives from the global industry including:

  • Bayer MaterialScience’s Global Procurement head, Dirk Jan de With
  • Dow Chemicals’ Corporate Chief Economist, Rafael Cayuela
  • Investec’s Chemicals Analyst, Paul Satchell
  • PwC’s Director, Deals, Don van Neuren
  • Reliance Industries President, Strategy & Business Development, Harish Davey
  • Shell Chemicals’ General Manager Kate Johnson, and Global Strategy Manager for Styrene and Aromatics, Herbert Le Lorrain

A €150 ($175) Early Bird Discount is available until Friday night – please click here to register.

PREVIOUS POST

Contagion hits financial markets as Great Unwinding continues

24/08/2015

Crude oil prices continued to fall towards $30/bbl last week.  Markets are fina...

Learn more
NEXT POST

China's smartphone market goes ex-growth as costs fall to $20

28/08/2015

China has the highest smartphone penetration in the world at 62%.  It had 632m ...

Learn more
More posts
G7 births hit new record low, below Depression level in 1933
14/07/2019

If a country doesn’t have any babies, then in time it won’t have an economy. But that...

Read
From subprime to stimulus…and now social division
06/07/2019

The blog has now been running for 12 years since the first post was written from Thailand at the end...

Read
Resilience amidst headwinds is key for H2
30/06/2019

Resilience is set to become the key issue as we look forward to H2, as I note in a new analysis for ...

Read
Perennials set to defeat Fed’s attempt to maintain the stock market rally as deflation looms
23/06/2019

Never let reality get in the way of a good theory. That’s been the policy of western central b...

Read
Europe’s auto sector suffers as Dieselgate and China’s downturn hit sales
16/06/2019

Trade wars, Dieselgate and recession risk are having a major impact on the European auto industry, a...

Read
2019 Global Outlook – a mid-year update: ACS webinar on Thursday
04/06/2019

There will be no shortage of important topics to discuss on Thursday, at my regular Chemistry and t...

Read
US-China trade war confirms political risk is now a key factor for companies and the economy
12/05/2019

There are few real surprises in life, and President Trump’s decision to launch a full-scale tr...

Read
Uber’s $91bn IPO marks the top for today’s debt-fuelled stock markets
28/04/2019

Uber’s IPO next month is set to effectively “ring the bell” at the top of the post...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more