Portion of ethylene capacity will shut-down in next 3 years
28 May '10
2 min read
At the recently concluded, Asian Petrochemical Industry Conference (APIC) held in Mumbai, it was revealed that, global ethylene market is facing oversupply and about five millions tons of capacity will be permanently shut-down in the next three years.
According to the analysis of an expert, currently the world has 300 million tons / year of ethylene capacity, already shut down (mainly in the United States).
In addition, about 1.7 million tons / year of ethylene production capacity in Western Europe will need to be shut down; 2.5 million tons / year of ethylene production capacity in Asian region (including China, South Korea and Taiwan) also needs to be shut down, while production capacity in other parts of the world would be re-optimized.
Under normal circumstances, within a period of time, ethylene capacity in the world will increase by about 12 million tons / year, while demand for ethylene will increase by only 5 million tons / year.
Ethylene production capacity is mostly concentrated in the Middle East and as of 2007, the Middle East achieved an ethylene capacity of 15 million tons after 20 years in building, and production capacity of ethylene in the region is expected to double by 2014, i.e., in only seven years.
Gary Adams, president of CMAI Company said, profit margin of olefin is expected to turn the corner in 2013, by then pricing power of olefin will return to olefin producers.