Despite struggles, Europe still key market in global resin picture

By Frank Esposito
Senior Staff Reporter

Published: April 15, 2014 2:06 pm ET
Updated: April 15, 2014 3:25 pm ET

Image By: IHS Daniele Ferrari, CEO of petrochemicals maker Versalis SpaA, speaks at the IHS World Petrochemical Conference.

Related to this story

Topics Materials Asia Europe Latin America Materials Suppliers
Companies & Associations

HOUSTON — Challenges and opportunities facing international plastics and chemicals markets were tackled by a trio of top executives at the IHS World Petrochemical Conference in Houston.

Like the United States, Mexico has large shale gas deposits. Development of these assets could give Mexico “the opportunity to replicate the success of unconventional oil and gas in North America,” according to Jose de Jesus Valdez Simancas, president of Mexico City-based petrochemicals firm Alpek SA de CV. Alpek’s assets include DAK Americas, which ranks as one of North America’s largest PET resin makers.

Mexico ranks sixth in global shale gas deposits. Elsewhere in Latin America, Argentina ranks third and Brazil ranks 10th. Mexico and Brazil account for about 70 percent of Latin American petrochemicals demand, Simancas said at the event, which was held March 26-27.

Investment is needed to develop Mexico’s natural gas base, and Simancas explained that new energy reforms there will allow private investment into upstream sectors. Currently, imports account for 30 percent of Mexico’s natural gas supply. Natural gas also is becoming more important as Mexico’s oil production has dropped 25 percent in the last eight years.

Mexico also will be the site of the next big polyethylene and ethylene expansion in the region, when the Braskem Idesa JV opens a major complex in Coatzacoalcos in 2015.

The European petrochemicals sector continues to battle its way back to prosperity, according to Daniele Ferrari, CEO of petrochemicals maker Versalis SpA in Milan, Italy.

“The world economy is up, but Europe continues to struggle,” he said.

Much of the region is emerging from recession, and its costs for natural gas — some of which is imported — remain high. The European trade balance would be positive without energy, Ferrari added.

“European chemical sales are growing, but they’re a smaller part of the global market,” he explained. “European companies have been squeezed by stagnant demand, high-priced feedstocks and bureaucratic burdens.”

But Ferrari added that “there’s a lot at stake” for the petrochemicals industry in Europe. The region has a population of 740 million, produces 41 percent of the world’s exports and is home to 20 percent of world plastic production.

European firms have responded by rationalizing older capacity — including more than 3 billion pounds of PE and ethylene — and by retrofitting production units to use lighter, natural gas-based feeds.

For its part, Versalis has invested in a pair of joint venture elastomers projects in Asia and in bio-based chemical projects in Europe with Genomatica and Elevance.

Petrochemical capacity and consumption continue to grow in the Middle East, according to Warren Wilder, executive director of downstream chemicals for state-owned Saudi Aramco in Riyadh, Saudi Arabia.

But the region’s big challenge is in “human capital” — finding workers for its industries.

Wilder said Saudi Arabia “continues to be a leader in the region” because of its strong GDP growth and young and growing population. Industries there also are moving from commodity products like PE and PP to performance polymers — such as nylon, polycarbonate and elastomers — as well as specialty chemicals. Saudi Aramco also has partnered with Dow Chemical on the massive Sadara joint venture plastics and petrochemicals complex in Saudi Arabia.

“Our greatest shortage is skills, not capital and not feedstocks,” Wilder said. “We’re evolving toward value-added chemical and plastics products.”


Comments

Despite struggles, Europe still key market in global resin picture

By Frank Esposito
Senior Staff Reporter

Published: April 15, 2014 2:06 pm ET
Updated: April 15, 2014 3:25 pm ET

Post Your Comments


Back to story


More stories

Image

US engineering plastics demand

April 20, 2015 2:29 pm ET

   More

Image

Ford moving forward in carbon fiber for 'high volume' use

April 17, 2015 10:21 am ET

Ford Motor Co. has signed a deal with a carbon-fiber manufacturer to jointly explore “high-volume” automotive uses for the lightweight...    More

Image

Force majeure declared at six European sites since mid-March

April 17, 2015 1:10 pm ET

At least six European resin makers have declared force majeure on polyethylene, polypropylene and related products since mid-March, leading to higher ...    More

Image

Executives step down from Star Thermoplastics

April 17, 2015 12:56 pm ET

Executives Randall Fortin and Larry Johnson no longer are with materials firm Star Thermoplastics Alloys & Rubbers Inc.    More

Image

Zoltek expanding CF capacity in Europe

April 17, 2015 10:12 am ET

Leading carbon fiber group Zoltek Corp. has signed a strategic agreement with the Hungarian government to expand its operation in northern Hungary, al...    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events