Midddle Eastern and Indian polyolefin producers margins could erode in 2010

The massive petrochemicals capacities due onstream in 2010 in the Middle East are likely to lead to a supply glut, leading to erosion of margins for polyolefins players in the Middle East and India compared to 2009 as per ICIS. The healthy margins these producers enjoyed this year on account of persistently high prices could diminish in the New Year. While oversupply is a key cause of concern for producers in the Middle East and India, an expected improvement in year-on-year demand growth for polyolefins in 2010 has led to market optimism. Demand for polyethylene (PE) and polypropylene (PP) is expected to grow at 5-7% in the Middle East in 2010 from 2009. The magnitude of demand increase in 2010 seems uncertain as the stimulus packages (which have driven demand) may run out. Prices of PP and PE are therefore expected to stabilise or even ease as compared to 2009 levels, with the easing of supply. The extent of the price decline would, however, depend on how much consolidation takes place outside the Middle East, and also the cost push from feedstocks. If crude and naphtha values remain high in 2010, as also ethylene and propylene feedstock costs, due to a heavy cracker turnaround schedule in Asia, the price decline for PE and PP may be less severe than anticipated. The strong growth in downstream segments such as packaging in the Middle East and automobiles in India provided room for hope, producers and end users. In India, demand for PE and PP is forecast to grow in double digits in 2010, with some grades, such as BOPP, non-woven PP and pipe grade PE expected to grow by more than 20%. However, converters in the Middle East and South Asia were worried that if prices remained high on the back of high feedstock costs, their margins would be severely squeezed.
  More News  Post Your Comment
{{comment.Name}} made a post.




There are no comments to display. Be the first one to comment!


Name Required.


Email Id Required.

Email Id Not Valid.


Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.

Message Required.

Click to Change image  Refresh Captcha
Milacron 450 ton electric injection molding machine

Milacron 450 ton electric injection molding machine