Global ethylene prices will enter a downturn period from 2009 to 2011
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According to analysts at Bank of America, global ethylene prices will enter a downturn period from 2009 to 2011. The research report states that in 2007, the global demand for ethylene grew at a rate of 3.9%, while capacity expansion was at 3.2%; however, in 2008 this situation reversed, with demand growth outpacing capacity expansion. In 2008, the growth rate of global ethylene production is expected to reach 4%, while the growth rate of demand will slow down to 3.2%. According to a research team led by Bank of America analyst Kevin McCarthy, the delayed commissioning of new global ethylene production capacity will not prevent a decline in ethylene prices. It is estimated that between 2009 and 2011, global new ethylene production capacity will increase by 22%-23%, while demand during the same period will only rise by 12%-13%. The research report indicates that although rising investment costs have led to the delay of some projects, no projects have been canceled so far. Transferred from China Chemical Industry Network
Looking at the surge in new ethylene projects around the world in recent times, it is clear that by around 2010 the market for ethylene-based chemicals will become more saturated, with demand reaching a relatively balanced level. The price trend will naturally decline.
In comparison, I am more concerned about the price of propylene; the increase in its price over the past few years goes without saying. It caused our profits to drop sharply.
Then why are there still so many ethylene projects being launched? The Chinese market should still have some flexibility, right?