Petrochemical demand in Asia, despite showing signs of slowing down, remains extremely strong. Ethylene prices hit record high levels of US$1,400/ton in Q3-2006. Ethylene continues in the range of US$1,100/ton and naphtha in the range of US$750/ton. Characteristically, such high feedstock prices would cause petrochemical producers to slow production. However, strong economies in Asia continue to boost demand for plastics. Demand for ethylene in Asia continues to grow at 6%, and overall petrochemical demand is at 10%.
2 ventures in Iran and a one in Qatar to turn natural gas into ethylene, could get delayed due to construction costs that have risen 60% in four years as the price of stainless steel more than doubled. Iran, the Middle East's second-largest chemicals maker, may take longer than expected to expand output. If ethylene crackers in the Middle East get delayed due to rising cost of construction, Eastern Asian producers such as Formosa and Mitsubishi may also hold more market share. The delays are expected to limit a collapse in chemical prices because of a glut once all the proposed plants are built. Prior to the delays, ethylene production capacity in Asia was set to rise by 8.2% pa between 2007 and 2010, more than double the 4% growth in demand over the same period, according to Chemical Market Associates.
08-Jun-07 
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