Rapid growth of Asian markets to determine new petrochem investments in the Gulf

17-Jan-05

The Asian region will constitute 50% of the global consumption. While all Asian countries will continue to grow, China and India with their large population base would almost constitute 75% of the Asian demand. China’s juggernaut on the plastics manufacturing continues, but India is also catching up with almost 8-10% overall growth of plastics in 2004 as well as 2005. More tahn half of Chinese polymet demand is met by imports. A shortage of polyethylene is expected in the Chinese market this year of approximately 4.5 million tons, where Kuwait's production of this plastic is 450,000 tons. The Middle East region is building up its strength in the petrochemical sector to take advantage of the availability of cheaper feedstocks and its proximity to the Asian petrochem demand hub. The Gulf region will continue to consolidate it's position in the next few years to become leading sources in the petrochemical industry worldwide. Close proximity of the Asian markets to the Middle East gives the investors in those markets a strong incentive. Investments in the petrochemical sector in the Gulf region is expected to hit US$40 billion by 2010. Middle East's production of polyethylene will total 18 million tpa by 2010, approx. 15% of the world's production. Kuwait's total polyethylene production is 650,000 tpa, whereas Saudi Arabia's production is about 2.3 million tpa.