Global basic chemicals market overcapacity

wallpapers Industry 2020-12-10

recently, at the 2015 IHS Global Petrochemical conference held in Galveston, Texas, USA, mark elamo, vice president of IHS chemical company, said: "due to the influence of capacity growth exceeding demand, the global basic chemical market is facing the danger of gradual overcapacity, and even serious excess may occur. Adjusting capacity investment to match the growth rate of production capacity with the growth rate of demand determines whether the market will fall into the plight of serious overcapacity. This will have a direct impact on the profitability of the entire industry. "

elamo said that since the financial crisis in 2008, the global demand for basic chemicals has increased significantly, but at the same time, the production capacity has increased faster, and the market has been oversupplied. This will reshape the profit pattern of global basic chemical production, in which the profits of ethylene and vinyl products are optimistic, while the profits of methanol are facing challenges.

elamo said that from 2010 to 2020, the world will add 231 million tons / year of basic chemical production capacity, with an average annual growth rate of 4%. For ethylene, propylene and methanol, the three major basic chemicals, the capacity growth will be stronger after 2015, while the growth of p-xylene and benzene will slow down. He noted that major producers of light olefins and methanol were seeking to invest in low-cost countries.

IHS chemical predicts that the demand for methanol, ethylene, propylene, benzene, p-xylene and chlorine will grow rapidly in the world. Among them, the demand growth of methanol is the fastest. From 2010 to 2020, the average annual growth rate will reach nearly 7%, with an average annual increase of 4.8 million tons. The average annual growth rate of ethylene demand is 3.5%, and 5.6 million tons of demand is added every year. This means that by 2020, global ethylene demand will increase by nearly 60 million tons / year and methanol demand by nearly 50 million tons / year, elamo said. IHS chemical forecasts that propylene demand will increase by 48 million tons / year, with an average annual growth rate of 4.2%; chlorine demand will increase by 28 million tons / year, with an average annual growth rate of 3.6%; p-xylene demand will increase by 19 million tons / year, with an average annual growth rate of 4.5%; and benzene demand will increase by 15 million tons / year, with an average annual growth rate of 2.3%.


, however, although the growth of demand is fast, the growth of production capacity exceeds the growth of demand. North America, China and the Middle East are leading the rapid growth of global basic chemical production capacity. North America in particular, stimulated by the shale gas boom, has seen strong growth in basic chemical capacity in the region. It is predicted that the global new methanol production capacity will exceed 50 million tons / year in the cycle, including more than 17 million tons / year in North America. The new capacity will be more than six times of the current methanol production in North America, which will make North America return to the ranks of the world's largest methanol producers. In addition, ethylene capacity in North America is also growing rapidly. According to Jim fittering, executive vice president of raw materials, performance plastics and supply chain at Dow Chemical, six new ethylene cracking units will be put into operation in the United States from 2017 to 2019. Dow is one of several chemical giants that are using cheap ethane feedstock in North America to expand ethylene production. Other companies planning to build cracking units include axial, Chevron Phillips Chemical, ExxonMobil Chemical, Formosa Plastics, shell chemical, Occidental / Mexico, odebrecht, Xinyue chemical, etc.

IHS chemical said that before the global financial crisis, supply and demand of basic chemicals were balanced, but with the financial crisis, demand in some markets shrank. At the same time, the production of new capacity in some regions has led to the oversupply of these major basic chemicals. "The performance of the methanol market is quite outstanding, and the current global methanol overcapacity is more than 50%. This means that methanol producers are suffering from a sharp decline in capacity utilization and low profitability. "


IHS chemical forecast that the global methanol overcapacity will drop to 40% in 2016, but will rise again to more than 50% by 2020. Before 2008, the global ethylene overcapacity rate was below 5%. By 2008, affected by the financial crisis, the excess rate reached nearly 15%, but then the excess rate began to decline. At present, the ethylene overcapacity rate has dropped below 10%, and it is expected to maintain a low excess rate before 2020. In 2007, the global supply and demand of propylene was balanced, and there was basically no surplus. However, the surplus rate is close to 10%. Although the surplus rate will increase before 2020, it may remain at the level of more than 10%. At present, the global chlorine overcapacity rate has exceeded 20%, but it will decline steadily in the next few years. By 2020, the excess rate will drop to about 5%.

elamo said that among the six main basic chemicals, the price of ethylene and chlorine may rise sharply before 2020 because of the low overcapacity rate of these two products. If there is a supply interruption or the demand growth is higher than expected, the market supply will be particularly tight.