Plastics News staff reporter Frank Esposito covered the following items from Flexpo 2004, held Sept. 15-17 in Galveston, Texas.
Crude, natural gas prices to stay high
Compared with their performance in the 1990s, prices for crude oil and natural gas are expected to remain high through 2015.
That's the viewpoint of Peter Killen, a senior adviser with Houston's Muse Stancil energy consulting firm. Killen expects crude oil to remain above $25 per barrel in that time frame, a number more than $4 above the material's 1990s average. Natural gas should stay at or above $4 per million Btu - almost double its 1990s average.
``U.S. resin producers have begun to adapt to this high-priced environment,'' Killen said. ``They're retiring older facilities, investing to increase efficiency, reducing cost and focusing on higher-value-added products.''
India is looking for foreign investment
India is throwing its doors open to the petrochemical industry, offering big opportunities for foreign investment.
The petrochemical market has seen annual growth of 14 percent in India recently, yet the nation's per capita polymer consumption still is only about 9 pounds per year, a rate about 80 percent below the world average.
The opportunity to increase India's polymer usage has drawn almost $7 billion in recent investment to the Asian nation, according to Pratyush Sinha, secretary of India's Department of Chemicals & Petrochemicals.
India has reduced its foreign tariffs in recent years and now provides an average return on foreign investment of 16 percent.
The country may need almost 9 billion pounds of resin capacity - in the form of 20-25 plants averaging some 440 million pounds of capacity - to meet future growth, said Veenu Gupta, director of India's Department of Petrochemicals.
Sabic resin capacity to increase by 40%
Saudi Basic Industries Corp. (Sabic) expects to boost resin capacity 40 percent in five years.
Polyolefins now account for almost one-quarter of Sabic's total chemical output, according to Faisal Syed, a market analyst with Chemical Market Resources Inc. in Houston. The Riyadh, Saudi Arabia-based firm accounts for more than half of all polyolefins production in the Middle East.
Recently, Sabic increased its presence in Europe with the acquisition of the polyolefins business of DSM NV and of Stamax BV. The firm also is a potential investor in Pemex's Phoenix Project, a major petrochemical site proposed in Mexico.
``Sabic is approaching the [petrochemicals] industry with a commodity mind-set, but they've also been improving their technology position,'' Syed said.