Increase in global petrochem derivatives likely

27-Apr-06

As per the Japanese Ministry of Economy, Trade and Industry, global petrochemical derivatives demand is projected to grow till fiscal 2010 due to the increasing demand in Asian markets, especially in China. Demand for derivatives is estimated to rise at an average rate of 4.3% pa for ethylene, 4.5% pa for propylene derivative, 3.7% pa for benzene and 5.6% pa for paraxylene. Ethylene derivative supply was in equilibrium in fiscal 2004, the market is estimated to be flooded with excess supply totaling 6.2 million tons in fiscal 2010. This estimated supply glut would be caused by a series of planned ethylene plant commissioning in China and the Middle East, and increased polyvinyl chloride output based on the acetylene calcium carbide process in China. Demand will rise considerably in the mid- and long-term, balancing the oversupply. Global propylene derivative demand is projected to increase from 61.6 million tons in 2004 to 80.3 million tons in 2010 by a rise in capacity at the rate of 4.1% pa.