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Eramo M.,CMAI
11AIChE - 2011 AIChE Spring Meeting and 7th Global Congress on Process Safety, Conference Proceedings | Year: 2011

Underlying feedstock prices that derive from either natural gas or crude oil represent a high percentage of the operating expense related to the production of ethylene for a vast majority of the global ethylene market. Growth in new ethylene capacity has occurred predominantly where feedstock can be obtained in sufficient quantities. A discussion covers CMAI's forecast of the olefins markets, both globally and in North America; and insights into how changes in feed slates will impact the markets. This is an abstract of a paper presented at the 2011 AIChE Spring Meeting & 7th Global Congress on Process Safety (Chicago, IL 3/13-17/2011).

Adams G.K.,CMAI
International Polyolefins Conference 2010: Finding Value in Today's Business Environment | Year: 2010

As predicted, dramatic changes occurred in global chemical markets as essentially all products witnessed the disappearance of tight market conditions, seemingly overnight. All sectors are experiencing the challenges over-supply presents, even though some of the new capacity has been delayed. CMAI's latest analysis of future dynamics reveals that the Global Recession has dramatically impacted demand. Growth rates will be significantly lower than trend, adding to a severely over-supplied market, which is influencing all value chains. Strategic plans must incorporate survival tactics and at the same time, position your company to quickly act on opportunities not available during better times. CMAI analysis suggests that global combined earnings for Basic Chemical and Plastics will turn out to be negative again on 2009 after remaining above reinvestment levels on average for the last five years. Integrated segment contributions will vary greatly as some chains are already approaching cyclic low earnings levels. These challenging times are creating opportunities for advantaged market participants - in polyolefins and other product groups. This presentation will reveal the reality that a sustainable recovery in earnings will have to wait until 2012 or 2013 at the soonest and profile North America's position in a global context throughout the remainder of this cyclic down-cycle.

Holmquist K.,CMAI
Oil and Gas Journal | Year: 2010

Several global capacity oversupply will characterize the ethylene industry through 2011 due to energy prices collapse, global recession, and start-up of large ethylene capacity in the Middle East and Asia. The industry cycle of building during high-profit periods leads to markets being over supplied in the petrochemical business. Ethylene capacity added in the Middle East brought the region's share of global capacity to 17% from 7% during 2000-10. The units in China, unlike the crackers in the Middle East, are being built to meet growing domestic demand for polyethylene and other ethylene derivatives. A build-up of surplus capacity can be seen 2001-03, with the global ethylene capacity surplus having peaked in 2002. The rate of recovery in global ethylene markets depends not only on capacity start-ups and shutdowns, but also on continued growth in demand. Demand in the Middle East has also changed rapidly with the region increasing to 16% of demand from 7%.

Zinger S.,CMAI | Stekla J.,CMAI
Hydrocarbon Engineering | Year: 2011

Some of the important trends in the ethylene market across the world are presented. The full impact of the current capacity is expected to influence the market in 2011-2012, as global operating rates will remain below 85% and profit margins will move to low levels for marginal producers. A recovery is expected to begin in 2013 with peak operating rates and profit margins returning in 2014-2015. The slow domestic demand growth for ethylene is expected to limit investments in new capacity in the more mature regions, including West Europe, Japan and North America. Some North American producers are taking advantage of the forecast continuation of the current ethane advantage by pursuing low cost capacity expansions. Asian producers will continue to invest in new capacity to take advantage of their proximity to the largest demand growth centers for petrochemicals. Ethylene demand growth in the Indian Subcontinent, Southeast Asia and Africa is projected to remain considerably above the global average, but from smaller absolute base levels.

Eramo M.,CMAI | Stekla J.,CMAI
Hydrocarbon Engineering | Year: 2010

Managing cyclability in the petrochemical business which will most likely to continue to be one of the greatest challenges facing global olefins producers and consumers is discussed. Volatility in energy and feedstock markets, shifts in economic growth and therefore the rate of demand growth, successful execution of new plant startups and the overall operating performance of existing assets, are all key variables that are difficult to predict and yet have a significant impact on market cycles and bottom line performances for the companies involved. CMA's surplus capacity analysis is used to forecast future trends in the supply/demand cycle by forecasting the eve of capacity surplus or capacity shortfall in a market. An important attraction to developing wet fields or gas feds with a high level of liquids 5 other propane and butane content. The current eve of annual ethylene demand hi the US has declined by approximately 4 billion lbs from the 2006 level.

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