Operating Rates and Profitability to Be Affected By Current Expansionary Period for Aromatics Industry
Posted on: Thursday, 6 December 2007, 15:00 CST
HOUSTON, Dec. 6 /PRNewswire/ -- Chemical Market Associates, Inc. (CMAI) forecasts in its recently completed 2008 World Benzene Analysis that as the global aromatics industry enters a major expansionary period, benzene will see lower operating rates and profitability. CMAI consultants explore this and various other market impacting scenarios in this annual global study covering the period 2002 to 2012 for the global benzene market. The analysis examines and provides an outlook for supply and demand dynamics, trade patterns, pricing relationships, profitability, production costs and technology. Access to CMAI's online Capacity and Supply/Demand databases gives clients the necessary tools for their strategic business decisions. Some key issues examined in the analysis are:
(Logo: http://www.newscom.com/cgi-bin/prnh/20061109/CMALOGO) The global aromatics industry is entering a major expansionary period.
This unprecedented scenario for the aromatics industry is expected to drive operating rates significantly lower and pressure industry profitability. Rationalization of inefficient and dislocated capacity will likely follow. The significant expansion of projected aromatics production capability will likely bring aromatics pricing more inline with historical cost relationships than in recent years. It is less likely that demand-pull conditions will exist for anything other than the short-term, especially after 2009. Higher-cost production will be pressured as operating rates fall and margins are squeezed. As a result, some rationalization of existing capacity is likely, including some co-product units in the Atlantic Basin.
Pygas flow from the cracker base is accelerating.
The ongoing desire to maximize propylene output has maintained the cracker contribution to benzene extraction feed and this trend will most likely continue through the forecast period. While efforts are underway to further exploit refinery sources and other propylene technologies, the crackers will remain the primary source of supply and provoke increased pygas output on a per ton of ethylene capacity basis. Efforts are also being made to exploit condensate and other liquid sources of hydrocarbons in the Middle East, which will boost liquids for aromatics processing.
The global market will become more regionally self-sufficient and inter-regional trade will decline.
In the last twenty years the volume of benzene traded across international boundaries has grown five-fold and more than doubled as a proportion of the total market. However, this trend is slowing and CMAI expects that within the next decade volumes moving between countries will stagnate and interregional trade will fall. The share of global commerce accounted for by trade will also fall significantly as the market becomes more regionally-focused rather than dependent on inter-regional trade. This will have ramifications for security of supply, supply chain management and pricing, especially in those countries that have become accustomed to large import positions.
CMAI's 2008 World Benzene Analysis is available in book and CD-ROM format. Online Capacity and Supply/Demand databases create a full spectrum of knowledge pertinent to these markets.
CMAI is a petrochemical, plastics, fibers and chlor-alkali consulting firm that services a wide range of companies all over the world. Since 1979, CMAI's goal has been to provide accurate, timely consulting services for the worldwide industries that it covers. CMAI maintains offices in Houston, New York, London, Dubai, Dusseldorf, Singapore and Shanghai. Clients to CMAI services include chemical and oil companies, engineering & construction companies, banking and financial institutions, plastic converters, grocers/retailers, government agencies and trading companies.
For more information on the 2008 World Benzene Analysis visit CMAI's website at http://www.cmaiglobal.com/ or contact:
Anne Geraci CMAI 11757 Katy Freeway, Suite 700 Houston, TX 77079 U.S.A Tel: 1-281-531-4660 Fax: 1-281-531-9966 Email: ageraci@cmaiglobal.com
Available Topic Expert(s): For information on the listed expert(s), click appropriate link. Alex Lidback http://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=55299
Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20061109/CMALOGOAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.com
Chemical Market Associates, Inc.
CONTACT: Anne Geraci of Chemical Market Associates, Inc.,+1-281-531-4660, fax, +1-281-531-9966, ageraci@cmaiglobal.com
Web site: http://www.cmaiglobal.com/
Source: PRNewswire
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