Analysts pointed out that the Asian chemical industry will be greatly affected in 2009 and may affect future development.
At the end of 2008, at the World Polymer Conference in Bangkok, Thailand, experts pointed out that the economic crisis may affect the development process in the next five to six years. Some Asian economies that have a great deal of dependence on exports, such as Singapore, Malaysia, South Korea, and China Taiwan, are now deeply impressed by the impact of the sharp decline in the US consumer confidence index for the first time in 100 years.
Other Asian economies also face their own problems, such as Thailand. Even if the world economy is not in the shadow of a major crisis, Thailand will also face great risks in building two more cracking and joint plants and a new aromatic plant, because both the Middle East and China are expanding their production capacity. Two cracker units in Thailand were constructed by PTT Chemical Company and Siam Cement Company and Dow Chemical Company, both of which will be put into operation within a few years. In addition, ExxonMobil and Shell Chemicals also built a new cracker in Singapore. These production capacities will all be put on the market, and actual demand will be much weaker than originally forecasted. Some chemical demand growth forecasts are made before September 2008.
PTT Chemical Co., Ltd. has already made predictions that due to financial difficulties, another set of $1 billion 600,000 to 1 million tons/year of naphtha cracker originally planned to be put into operation in 2012 will be postponed. Its cracking unit, which uses 1 million tons/year of ethane as raw material, was originally scheduled to be put into operation at the end of 2008 and will be postponed.
Paul Hodges, head of eChem International, a UK-based consultancy, believes that no matter how the market deteriorates, the new cracker complexes of Middle East producers will still operate at high operating rates because of low production costs. Although China does not have the same cost advantage, it will maintain a high operating rate in light of the need for alternative import strategies.
At the end of 2008, at the World Polymer Conference in Bangkok, Thailand, experts pointed out that the economic crisis may affect the development process in the next five to six years. Some Asian economies that have a great deal of dependence on exports, such as Singapore, Malaysia, South Korea, and China Taiwan, are now deeply impressed by the impact of the sharp decline in the US consumer confidence index for the first time in 100 years.
Other Asian economies also face their own problems, such as Thailand. Even if the world economy is not in the shadow of a major crisis, Thailand will also face great risks in building two more cracking and joint plants and a new aromatic plant, because both the Middle East and China are expanding their production capacity. Two cracker units in Thailand were constructed by PTT Chemical Company and Siam Cement Company and Dow Chemical Company, both of which will be put into operation within a few years. In addition, ExxonMobil and Shell Chemicals also built a new cracker in Singapore. These production capacities will all be put on the market, and actual demand will be much weaker than originally forecasted. Some chemical demand growth forecasts are made before September 2008.
PTT Chemical Co., Ltd. has already made predictions that due to financial difficulties, another set of $1 billion 600,000 to 1 million tons/year of naphtha cracker originally planned to be put into operation in 2012 will be postponed. Its cracking unit, which uses 1 million tons/year of ethane as raw material, was originally scheduled to be put into operation at the end of 2008 and will be postponed.
Paul Hodges, head of eChem International, a UK-based consultancy, believes that no matter how the market deteriorates, the new cracker complexes of Middle East producers will still operate at high operating rates because of low production costs. Although China does not have the same cost advantage, it will maintain a high operating rate in light of the need for alternative import strategies.
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