Plastics News staff reporter Frank Esposito wrote the following briefs from the Chemical Market Associates Inc. 2002 World Petrochemical Conference and DeWitt World Petrochemical Review 2002, both held March 20-21 in Houston.
Ethylene demand is expected to rise
U.S. ethylene demand is expected to pick up by the end of 2002, with operating rates approaching 85 percent, according to CMAI consultant Mark Eramo.
The market should post growth of about 5 percent after a disastrous drop of more than 9 percent in 2001, Eramo said. Per-pound pricing, however, is expected to slide to about 18 cents, down from an average of 26 cents in 2001.
The idling or shutdown of more than 4.5 billion pounds of U.S. ethylene capacity by Equistar Chemicals LP, Huntsman Corp., Chevron Phillips Chemical Co. LP and Dow Chemical Co. is expected to bring some tightness to the market, he added.
Will Mideast export finished plastics?
Massive foreign investments in Saudi Arabia could yield at least 6.6 billion pounds of capacity for ethylene, polyethylene and other derivatives during the next several years.
At the request of the Saudi government, North American and European firms submitted project bids in 1998, CMAI consultant Pat Rooney said. The first project alone - a four-way partnership among Exxon Mobil Corp., Royal Dutch Shell Group, BP plc and Phillips Petroleum Corp. - could yield 4.4 billion pounds of capacity.
The region's explosive growth - tied into its dominant position in global oil markets - also could lead both Saudi Arabia and oil-rich Iran into global markets for finished plastic goods, Rooney said.
``A more interesting question ... is, will [Saudi Arabia and Iran] be satisfied to be an exporter of plastic pellets?'' he added. ``Could either ... become a major exporter of polyethylene film, for example? We would certainly not discount the possibility.''
Propylene output should be headed up
Global propylene production is expected to grow more than 5 percent per year between 2006 and 2010, CMAI consultant Steve Zinger said. That number is a slight increase over the 4.5-4.6 percent growth rate the key feedstock posted from 2001-05.
By comparison, petroleum growth should check in at 1-2 percent in 2001-05 and should stay in that range from 2006-10, Zinger said.
CMAI estimates current North American propylene prices at 12-16 cents per pound. A year ago, CMAI's propylene price range stood at 16-22 cents per pound.
Nylon rebounding, but needs new uses
The nylon resin market should bounce back somewhat in 2002 after a dismal 2001, but still faces some significant challenges.
With automotive and electronic markets hurting, North American nylon sales dropped 15 percent in 2001, according to the American Plastics Council in Arlington, Va. Average per-pound selling prices for both nylon 6 and 6/6 resins slumped 15 percent in 2001.
Chemical Market Associates Inc. consultant Ian Julian said the global market should recover enough to average 4 percent annual growth through 2005, but he warned that nylon will be oversupplied regionally unless new applications are found.
Finding new applications could be more difficult as well, Julian said. The nylon market is more mature than those of some competing materials, leaving ``less money for research, and consequently less innovation.''
Julian also expects nylon's presence in the automotive sector to continue to increase, particularly if the United States adopts new fuel-efficiency standards.
Sabic positioned for styrene growth
Saudi Basic Industries Corp. is looking to leverage its styrene monomer position in the Asia-Pacific region.
Sabic adviser Gordon Boyd said the Riyadh, Saudi Arabia-based firm expects nonintegrated export demand for styrene to grow 4.5 percent, equaling 22 percent of the world total by 2006. Almost 70 percent of that demand is in northeast Asia. Sabic, with 1.1 billion pounds of styrene capacity, is well-positioned to benefit from that growth.
The company recently acquired a shipping company to help handle its growing bulk chemical logistics. Sabic could see competition in the region's styrene market, however, since five new plants with total annual capacity of about 5.7 billion pounds will be built in Singapore, China and the Middle East by 2006.
In addition to its styrene output, Sabic produces about 350 million pounds of polystyrene and expanded PS in the region.