Is the cyclical effect of over-capacity surfacing?
 
“Further restructuring in Asia seems inevitable…”  26/2/07, Chemical Business
“Taiwan – Mailiao cracker start up spells trouble for plastics”  7/6/07, Chemical Business (India)
 
The demand for petrochemical in the Asian markets remains extremely strong despite signs showing that it should be slowing down. Consultants advised that this is due to robust Asian economies that has driven the demand for plastics, hence keeping the petrochemical markets healthy.
 
Chinese producers have been focusing on adding capacity at local plants while looking abroad only for feedstocks.  New foreign cracker JVs will also be coming on-stream in the next few years. Will China finally relegate the rest of Asia to obsolescence by changing from net buyer to net exporter, as evident in polyester fiber, PET and soon-to-be PTA, etc? With sheer market size and scalability potential, will China eventually dictate prices? How can the rest of Asia survive such scenario with the soon-to-be surplus because of the dedication to exports (to China)?
 
“The Middle East will double its share of ethylene capacity to 20% of global production by 2011” Chemical Business, 23 April 2007
 
Producers in the Middle East have their own petrochemical projects/expansion in the pipeline.  What will be the shape of the petrochemical industry when all the announced projects in the Middle East come onstream?  How are the industry players responding to this impending challenge? Will the rising EPC cost & acute manpower shortage help stagger these projects coming onstream, cushioning the effect of impending downturn?
 
This shifting of fengshui is having us worry because return on investment is long, cycles are complex and steep.  The eventual survivors are countries which have the raw materials and hopefully big enough domestic market.  With economies of scale and technological advances, the rising freight cost and decreasing conversion cost will also meet at equilibrium. Thus, local sourcing, production and distribution within local market will be the priority.
 
On the regulatory side, REACH is implemented on 1 June 2007, and what should the Asian producers do to fulfil their obligations under the legislation.  Also, come 2008 when the second phase of the EU emission trading scheme (EU ETS) kicks in, how should the petrochemical industry respond or get ready? 
 
Come and meet other leading petrochemical producers, customers and traders from across Asia to discuss and debate the key issues and challenges affecting the industry to 2010 and beyond, and to get an update on the development on the Styrene and Butadiene markets.
 
Presenting a complete and latest view of the industry, CMT’s 15th ASIA Petrochemical Summit features key organisations and senior decision makers, providing attendees with exceptional networking and business opportunities.
 
A must attend event for your 2007 calendar. Register online @ www.cmtevents.com with your team.
 
YOU WILL NETWORK WITH
• CEOs • Presidents • GMs • Advisers • Product/Marketing/Sales Directors • Business Development Managers • Executives & Traders from leading Oil and Petrochemical companies • Coal & Natural Gas Producing Companies • Refineries, Additives & Catalyst Companies • Industry Consultants • Project Financiers • Technology Licensors • International Engineering and Contracting Firms supporting the energy industries