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CMAI 2010: Where Petchem Superstars Unite!

12:01 PM MDT | March 25, 2010 | By LINDSEY BEWLEY

It’s the most wonderful time of the year! Okay, the Christmas season is technically the “most wonderful time of the year,” but for me, the annual CMAI World Petrochemical Conference comes in a close second.
 
Not only do I get to hear about the petchem industry’s outlook for this year and the next 5 years from the experts, but I also get to meet a bunch of fun industry players. Yesterday’s personal highlight was meeting Mark Eramo, executive v.p./market advisory services at CMAI. I consider Mark to be the superstar of the petchem world. We’ve spoken several times before, but this is the first time we met face-to-face. It was like meeting a true rockstar—and I’ve met several rockstars, including Bono on multiple occasions. Meeting Mark was the professional equivalent of meeting Bono—just awesome. Not only is Mark an expert on North American olefins and derivatives, but he knows a ton about global petrochemical markets as well. His insight into the market always rocks.
 
Another highlight was hearing Gary Adams, president of CMAI, declare that the global demand crisis is over. “But the oversupply crisis has just arrived,” Adams says. However, there are good reasons to be optimistic. “Developing markets—those engines for growth, like China and India—these are regions emerging into a larger consumption base,” he adds.
 
These developing countries, emerging and emerging consumers will all contribute to bringing the average annual growth rate to about 5.3% for the global basic plastics and chemicals through 2015, Adams says.
 
Demand for petrochemicals is expected to grow globally at about 5%/year over the next few years, CMAI says. However, surplus capacity is forecast to keep profits flat through 2012, before picking up in 2013 and achieving peak cycle profits by 2014-2015.
 
Demand in Asia is forecast to grow much faster than the global average, about 10% or greater through 2015, affording some advantage to local producers. “From a demand standpoint, it’s better in Asia than a year ago. Stimulus and restock programs worked. Some signs of a return to real demand—we’re starting to see some signs of real consumption,” Adams says.
 
Demand growth in North America will be about 2%/year, while Europe will grow about 1.7%/year, supplemented by growth in the developing world, CMAI says. This expected growth is encouraging, as it follows a 7.1% decline in global demand during the 2008 recession, Adams says.
 
The trend of consolidation and the rationalization of older, high-cost capacity will continue through 2013 or even later, CMAI says. Capacity rationalization is expected to be concentrated in higher-cost regions, including Northeast Asia, Western Europe and North America. About 7.5-9 million m.t. of global ethylene capacity will be rationalized through 2012; between the end of 2008 and 2010, about 3 million m.t. of global ethylene capacity will be shut down, CMAI adds.
 
Overall, the first day of CMAI was a success. I’m looking forward to sitting on the Chlor-Alkali sessions and the Olefins sessions to hear more what CMAI has to say. Truly, there are rockstars among us in the petchem industry—and leading the pack is CMAI.












 
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