Global petrochemicals market expected to grow by 6.7% from 2012 to 2018

MOSCOW (MRC) -- The global petrochemicals market was valued at USD472.06 bln in 2011 and is expected to reach USD791.05 bln by 2018, growing at a CAGR of 6.7% from 2012 to 2018, said Plastemart.

In terms of volume, the global petrochemicals consumption was 436.86 mln tons in 2011 and is expected to reach 627.51 mln tons by 2018, growing at a CAGR of 5.4% from 2012 to 2018, as per Transparency Market Research.
Growing consumption from major end use industries including construction, packaging, transportation, textile, plastics, healthcare and so on coupled with favorable operating conditions mainly in the Middle East and Asia Pacific is expected to drive the global market for petrochemicals over the next five years.

Government initiatives in India and China to set up petrochemical complexes in the region are also expected to fuel the market growth. The rapid exploration and development of unconventional gases such as shale gas is also expected to provide feedstock advantage to petrochemical producers. However, volatile raw material prices and growing environmental concerns regarding the production and usage of various petrochemicals are expected to be a key challenge for market participants.

Regulatory intervention has resulted in the industry shifting focus towards developing bio-based alternatives for petrochemicals. Ethylene dominated the petrochemical market and accounted for over 28% of the total consumption in 2011. Growing demand for polyethylene, a major derivative of ethylene, mainly from packaging industry is expected to boost the global market for ethylene over the forecast period. However, widening supply- demand gap due to capacity addition in the Middle East and Asia Pacific is expected to put pressure on ethylene prices, globally. In terms of volume, methanol is expected to be fastest growing petrochemical at an estimated CAGR of 10.3% from 2012 to 2018. The growth of methanol is largely driven by its emerging application in gasoline blending and conversion of methanol to olefins (MTO).

China was the leading consumer of petrochemicals and accounted for over 25% of the global consumption in 2011. Along with being the largest market, China is also expected to be fastest growing market, at a CAGR of 6.7% from 2012 to 2018, owing its significant downstream processing capacity. Asia Pacific including China accounted for over 45% of the total demand in 2011. North American market for petrochemicals is expected to be driven by rapid development of shale gas in the U.S. The global market for petrochemicals is highly fragmented in nature. Top ten companies accounted for just over 49% of the total petrochemicals market in 2011. BASF, Sinopec and Exxon Mobil were the largest petrochemical manufacturers and together accounted for nearly 20% of the total market share in 2011.

Major industry participants have fully integrated operations from extraction of crude oil and natural gas to production of petrochemical derivatives. Some of the other players operating in the global petrochemical market include Chevron Phillips, Dow Chemical, Company, Ineos, LyondellBasell, National Petrochemical Co., PetroChina, SABIC, Shell Chemicals and Total among some other companies.

MRC

PolyOne Corporation announces quarterly dividend

MOSCOW (MRC) -- The Board of Directors of PolyOne Corporation (NYSE: POL) has declared a quarterly cash dividend of USD0.06 per share on the common stock outstanding, to be paid on October 3, 2013, to shareholders of record on September 13, 2013, said Reuters.

As MRC wrote before, PolyOne announced it will realign its North American manufacturing assets to better serve customers, improve efficiency, and deliver previously announced synergy-related cost savings in connection with its March 2013acquisition of Spartech Corporation. Over the next several months, the company will close six manufacturing plants and relocate production to other PolyOne facilities. These actions are expected to be completed by the end of 2014 and generate annualized pre-tax savings of approximately USD25 millionin 2015.

PolyOne Corporation, with 2012 revenues of USD2.9 billion, is a premier provider of specialized polymer materials, services and solutions. The company is dedicated to serving customers in diverse industries around the globe, by creating value through collaboration, innovation and an unwavering commitment to excellence.
MRC

Pertamina and Chandra Asri scrap joint venture deal

MOSCOW (MRC) -- State energy firm Pertamina is abandoning a deal with Chandra Asri Petrochemical, the country’s largest petrochemical producer, to establish a joint venture to build a petrochemical plant, as per GV.

In December, Pertamina and Chandra Asri signed a memorandum of understanding to perform a feasibility study for building a petrochemical facility. The agreement was predicated on the establishment of a joint venture.

"After conducting joint studies, Pertamina and Chandra Asri Petrochemical agreed to end the memorandum of understanding out of mutual interest for the reason that both parties can not reach an agreement on terms of the planned joint venture," said Ali Mundakir, Pertamina’s vice president for corporate communication, refusing to disclose further details.

Pertamina and Chandra Asri initially planned to build a petrochemcial plant to produce 250,000 tons of polypropylene a year. The cost of investment for the deal was estimated at USD 200 million.

The latest development comes just weeks after Pertamina announced a petrochemical business agreement with Thailand’s PTT Global Chemical and Chandra Asri signed a USD435 million joint-venture agreement with Paris-based Michelin to produce synthetic rubbers.

As MRC informed earlier, last month, Pertamina signed an agreement to purchase petrochemical products from PTT Global Chemical, as part of the pre-marketing strategy of the companies’ joint Indonesian petrochemical business.

Pertamina and PTT Global Chemical have already entered a joint venture agreement to build a petrochemical facility with an annual production capacity of 1 million tons and estimated cost of USD5 billion. The facility will produce ethylene and polypropylene, as well as polyethylene and polyvinyl chloride. Construction of the facility is expected to start next year, with production beginning in 2018.

Pertamina has said it plans to make petrochemicals a key part of its business and become a regional leader by 2025. The state-owned company holds a 10% share of the domestic petrochemical market, which, due to low refinery capacity, relies on around USD 5 billion a year in imports. Pertamina expects to hold 30% of the market when the facility, expected to be built near one of its existing refineries, commences operation.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.
MRC

Saudi Arabia could become global ethylene hub

MOSCOW (MRC) -- Saudi Arabia could well become a global hub of ethylene and its derivatives, according to a latest report released by the National Commercial Bank (NCB), according to Fibre2fashion.

The recent shale oil and gas deposit discoveries in Saudi Arabia would drastically change the global landscape of the petrochemical industry over the next five years, according to the NCB’s Semi-Annual Sector Review.

The review states large capacity additions are to be expected from both Asian as well as Middle Eastern producers due to these discoveries, whereas high-cost producers from other parts of the world would be squeezed out and petrochemical prices are likely to come under pressure in the long term, reports Saudi Gazette.

The abundance of ethane rich associated gas sold at a subsidized rate of USD 0.75 per million btu has initiated the launch of a series of projects in the country which would make it a global hub of ethylene and its derivatives.

The NCB report said the proximity to dominant Asian markets would allow producers from the country to capture a greater share of demand and also encourage foreign investment.

The country’s capacities of ethylene and polyethylene are forecast to reach 16.08 million tons per annum (mtpa) and 5.45 mtpa by 2015, respectively.

Saudi Arabia is considered among the largest producers of polymers in the world with an annual production of more than 8 million tons. In 2012, Saudi Arabia produced more than 18 million tons of ethylene, the most basic petrochemical that is also used as a raw material for the textile industry.

We remind that, as MRC informed previously, Saudi Arabia, the world's largest exporter of crude oil, has unveiled its intentions to remain a world energy powerhouse for the foreseeable future, partly by exploiting new technology which has unlocked vast quantities of oil and natural gas in North America. Saudi Arabia pushed ahead this year with exploratory drilling of shale and other unconventional gas reserves which could be twice the size of its conventional gas reserves, which total 286 trillion cubic feet.
MRC

PVC shortage in the Ukrainian market resulted in price increase

MOSCOW (MRC) - Ukranian market of polyvinyl chloride (PVC) undergoes a shortage in the supply following limited export quotas from European producers and a significant decline in resin purchases from the US. The PVC prices in the local market have exceeded UAH12,000/tonnes by the end of July, according to ICIS-MRC Price Report.

The scheduled and unscheduled plants shutdowns in Europe amid stronger domestic demand made European producers cut their export quotas for Ukraine in July further. The supplies of North American PVC have been also reduced significantly.

All of these factors with a stable demand from Ukrainian converters have created a shortage in the local market.
The prices of European PVC by the end of July have reached UAH12,000-12,500/tonne CPT Kiev, including VAT.
Some Ukrainian companies said that their orders for July delivery from the European PVC producers have been cut in half.

The supply of European PVC in August is expected to be worsened further. Hungarian BorsodChem plans to stop PVC production for a month long maintenance works in early August. The share of the Hungarian PVC in the Ukrainian market accounts for 30%, and the average monthly PVC shipments of the company totals more than 2,000 tonnes. The reluctance of many Ukrainian companies to buy PVC in the US contributes to the situation.

The purchases of the North American resin by Ukrainian companies in May-June were limited because of the storng price (the European PVC was cheaper) and rumours of Karpatneftehim's restart. Rumours were heard in early June that an anti-dumping duty on US PVC at a rate of 50% would be introduced within next couple of months, which discourage the converters' desire to buy US material.

In line with a limited supply of PVC Ukrainian producers expect further price increases. Last week some European producers have announced an increase in export prices for PVC supplies in August by EUR15-25/tonne, compared with the July level.
MRC