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Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
Worldoils Oil, Gas and Offshore Marketplace    

Equipment ID   : 881
Equipment name   : Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
Category   : Research Reports
Specifications   : Name of the Report :
Top Ten Trends in the Petrochemical Industry in 2011

Publication date : December 2010

Petrochemicals capacity will continue to migrate to low-cost locations :

The North American petrochemical industry has traditionally held the number one position
in global petrochemical production as well as exports. The North American petrochemical
industry has gone through several phases in its lifecycle, starting from its initial growth and
capacity expansions to a stage of reduced marginal returns that led to it dealing with a
possible slump. The recent slowdown in the North American petrochemical industry has been
brought about by the increase in competition from price-competitive producers in the Middle
East and Asia. The opportunities for US commodity plastic exports, for instance, have reduced.
This is because a large volume of Middle East plastic export capacity with a significant cost
advantage is displacing other exporters in China, the US, Korea and Japan. Another major
reason is the resource constraints and high feedstock prices in North America. The rising
feedstock prices are forcing many North American petrochemical producers to reassess their
profit margins in comparison to that of global players.

The capacity additions in the global petrochemical industry are increasingly favoring Asia-Pacific
and Middle Eastern locations. The major reason for this shift is the economies of  production in
these regions. The Middle East has an unparalleled feedstock advantage and Asia-Pacific
countries like China and India offer very low labor costs compared to North American and
European countries.

Coal will grow as a key feedstock for petrochemicals production :

The major feedstock for petrochemicals production has historically been naphtha and natural
gas. Coal and Liquefied Petroleum Gas (LPG) is also used in the production of petrochemicals.
However, the use of coal as a feedstock for petrochemicals is becoming popular exceptionally 
quickly in China. There are two main drivers behind the push for more coal-to-gas projects in
China. One is the soaring demand for gas due to urbanization and environmental concerns,
and the other reason is that China has plenty of coal, while oil and gas are in short supply.
China is the biggest producers of many petrochemicals in the world. The increasing use of
coal feedstock in China is continuously increasing the share of coal-based petrochemicals
production globally.

China has, in the past few years, focused on developing coal-based liquid fuels as raw
materials in order to reduce its dependency on imported oil. With rising crude oil prices the
Chinese government has been eager to find ways to reduce oil imports. China has huge
reserves of coal and is the largest producer of coke in the world. Coke is produced by three
types of producers in China : captive coke production plants of iron-steel makers, coke plants
of chemical producers, and dedicated coke producers. The country has around XX producers
of coke with nearly XX of them having a large capacity. Due to the availability of low cost coal in
the country, it had been easy for many petrochemical manufacturers in the country to adopt
coal-based raw materials.

China will lead the demand growth of petrochemicals globally :

China has emerged as the biggest petrochemical market in the world. Petrochemical demand
growth is closely associated with the economic growth of a country, and China is the fastest
growing economy in the world. The GDP of China is growing at a rate much higher than that
of most other economies of the world. The country has successfully maintained its 8% growth
despite the impact of the global financial slowdown, while most large economies in the world
have witnessed a downturn. With a growing economy, rising per capita income in the country
also helps the petrochemical market to grow. Demand for petrochemicals in China is also
rising, with growth in the infrastructure and construction industry, packaging industry, textile
industry, automotive industry, the consumer goods and electronics markets, and many other
industries which are major markets for petrochemicals.

The rapidly growing packaging industry of China plays an important role in the growth of plastic
processing industry and the demand for petrochemicals in the country. The contribution of the
construction industry to China’s GDP also continues to grow. The growing infrastructure in
China is strongly driving the demand for petrochemicals. The strongest growth was observed
in the market for Polyvinyl Chloride (PVC), which is a very important chemical in the construction
sector, used largely for making pipes, window frames and sidings.

Table of Contents

1 Table of Contents ........4
1.1 List of Tables ........6
1.2 List of Figures ........7

2 Introduction ........8
2.1 Report Coverage ........8

3 Petrochemicals Capacity Will Continue to Migrate to Low-Cost
Locations........9
3.1 Cheap Labour and Rapidly Growing Domestic Markets are Driving
the Capacity Additions in Asia-Pacific ........12
3.2 Availability of Cheap and Abundant Feedstock Forces Capacity
Additions in the Middle East ........14

4 Coal Will Grow as a Key Feedstock for Petrochemicals Production ........15
4.1 VCM Capacity Based on Coal Feedstock is Expected to Increase in
China ........18
4.2 Interest in Coal Gasification Process for Petrochemicals Production Will
Increase ........20
4.3 Increasing Use of Coal Will Continue to Raise Environmental
Concerns ........20

5 China Will Lead the Demand Growth of Petrochemicals Globally ........21
5.1 The Giant Plastic Processing and Packaging Industry of China is the Major
Force Driving the Petrochemicals Demand ........24
5.2 Rapidly Growing Infrastructure and Construction Industry of China Will
Lead the Market to Grow ........26
5.3 The Robust Automotive Industry of China is Expected to Boost Growing
Demand in the Country ........28
5.4 Huge Textile Industry of China Will Help Growth in Consumption ........30

6 Packaging Industry Will Contribute to Demand Growth for Major
Petrochemicals Globally ........31
6.1 Major Characteristics of Plastic Packaging Which Will Drive Growth ........33
6.1.1 Convenience ........33
6.1.2 Barrier Protection and Cost-effectiveness ........33
6.1.3 Differentiation Through Design ........34
6.1.4 Smart Packaging ........34
6.2 Beverage and Food Packaging Continues to be the Major Market for
Petrochemicals in the Global Packaging Industry ........34

7 Feedstock Advantage Will Encourage the Growth in Downstream Petrochemical
Industry in Middle East ........36
7.1 Feedstock Advantage Will Lead the Growth in Petrochemical Capacity in the
Region ........36
7.2 Low-priced Raw Materials Will Help in the Diversification Strategy of the Middle
East Petrochemical Industry ........41
7.3 Key Upcoming Trends in Middle Eastern Petrochemical Industry ........41
7.3.1 Proximity to Growing Asian Markets Will Continue to Drive Middle East
Petrochemical Exports ........41
7.3.2 Constrained Supply of Gas-based Feedstock in the Region May Impact the Industry
Growth ........42
7.3.3 Delayed Execution of Projects Might Hinder Fast Industry Growth ........42

8 The Increasing Crude Oil Prices Will Lead to Rise in Petrochemical Prices ........43
8.1 The Price of Aromatics is Expected to Rise by Around 2.8% in 2011 .......44
8.2 The Olefins Price is Expected to Rise by Around 6.2% in 2011 ........46

9 Growing Carbon Emissions and Tightening Regulations Will Restrict the Industry
Growth ........48
9.1 Regulatory Measures ........54
9.1.1 Regulatory Measures in Europe ........54
9.1.2 Regulatory Measures in the US ........55
9.1.3 Regulatory Measures in China ........57

10 North American and Western European Petrochemical Demand Will Continue to
Lag ........59
10.1 The Share of North America and Europe in Global Petrochemical Demand Will
Reduce ........60

11 Petrochemical Industry in North America and Western Europe is Expected to Move
Towards Consolidation ........63
11.1 The Number of Acquisition Deals is Expected to Rise in North America and
Europe ........64
11.1.1 Inpex Announces Secondary Offering for $6.6 Billion ........68
11.1.2 Inergy Holdings to Merge With Inergy ........68
11.1.3 Sinopec Issues Convertible Bonds for $2.9 Billion ........69
11.1.4 LyondellBasell Completes Private Placement of 8% Senior Notes Due 2017 for
$2.75 Billion ........69
11.1.5 Lyondell Chemical Prices Private Placement of Senior Secured Notes for $2.75
Billion ........69
11.1.6 SABIC Announces Private Placement of $2.6 Billion ........70
11.1.7 Hyundai Heavy Industries to Acquire Additional 70% Stake in Hyundai
Oilbank ........70
11.1.8 BP Files Public Offering of Notes for around $2 Billion ........70
11.1.9 PEMEX Completes Private Placement of 5.5% Bonds Due 2021 for
$2,000m ........71
11.1.10 The Dow Chemical Issues 4.25% Senior Unsecured Notes Due 2020
for $1.75 Billion ........71

12 Increasing Capacity Will Lead to Enhanced Competitiveness of Asian Companies ........72
12.1 Economic and Feedstock Difficulties are Expected to Impact the Profitability of Producers
in North America and Europe ........72
12.2 The Growing Investments and Expansions Will Lead to Increased Competitiveness of the
Asian Petrochemical Producers ........74

List of Tables
Table 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million Tons,
2005-2015 ........10
Table 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Table 3 : PVC, Global, Capacity With Coal as a Feedstock, Million Tons, 2000-2020 ........17
Table 4 : PVC Production, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........19
Table 5 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........23
Table 6 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........25
Table 7 : PVC, China, Demand, Million Tons, %, 2000-2020 ........27
Table 8 : SBR, China, Demand, Million Tons, %, 2000-2020 ........29
Table 9 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........32
Table 10 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......33
Table 11 : Ethylene, Prices, $/Ton, 2000-2020 ........38
Table 12 : Propylene, Prices, $/Ton, 2000-2020 ........40
Table 13 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........45
Table 14 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........47
Table 15 : Petrochemical Production and CO2 Emissions, Global, Million
Tons, 2000-2018 ........49
Table 16 : Major Petrochemical Contributors to Carbon Emissions,
Global, %, 2010 ........51
Table 17 : CO2 Emissions by Region, Million Tons, 2000-2018 ........52
Table 18 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Table 19 : Major Polymers, North America, Europe, Rest of the World, Demand
Million Tons, 2000- 2020 ........61
Table 20 : Major Polymers, North America, Europe, Rest of the World, Demand
Share , %, 2010 and 2015 ........62
Table 21 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........64
Table 22 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Table 23 : Top 10 Deals in Petrochemical Industry, Global, 2010 ........67
Table 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........74

List of Figures
Figure 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million
Tons, 2005-2015 ........10
Figure 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Figure 3 : Coal to Petrochemicals, Value Chain ........15
Figure 4 : PVC, Global, Capacity Share With Coal as a Feedstock, %, 2000-2020 ........16
Figure 5 : PVC, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........18
Figure 6 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........22
Figure 7 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........24
Figure 8 : PVC, China, Demand Share, %, 2000-2020 ........26
Figure 9 : SBR, China, Demand Share, %, 2000-2020 ........28
Figure 10 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........31
Figure 11 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......32
Figure 12 : Ethylene, Prices, $/Ton, 2000-2020 ........37
Figure 13 : Propylene, Prices, $/Ton, 2000-2020 ........39
Figure 14 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........44
Figure 15 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........46
Figure 16 : Petrochemical Production and CO2 Emissions, Global, Million Tons,
2000-2018 ........48
Figure 17 : Major Petrochemical Contributors to Carbon Emissions, Global, 2010 .....50
Figure 18 : CO2 Emissions by Region, Million Tons, 2000-2018 ........51
Figure 19 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Figure 20 : Major Polymers, North America, Europe and the Rest of the World, Demand
Million Tons, 2000-2020 ........60
Figure 21 : Major Polymers, North America, Europe, Rest of the World, Demand Share,
%, 2010 and 2015 ........62
Figure 22 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........63
Figure 23 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Figure 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........ 72

2 Introduction

Petrochemicals are chemicals produced from petroleum, that is, crude oil and natural
gas. Petrochemicals are used in a variety of forms in different industries. The
petrochemical industry has been one of the most important commodity industries and
the backbone of many applications. The petrochemical industry is in a mature stage in
developed countries, whereas it is in a growth stage in the world’s developing economies.
The global petrochemical industry is witnessing a shift of power from the traditionally
dominant developed regions of the world to emerging economies in the developing
regions.

2.1 Report Coverage :

The coverage in this report is as follows :

- Chapter 3 contains detailed analysis of the shift of the global petrochemical capacity from
traditionally strong regions to emerging regions. It compares the capacity additions and planned
projects of major petrochemical companies in different regions. The chapter also gives an
explanation of the factors leading to the shift.

- Chapter 4 explains the trend of coal emerging as a major feedstock in petrochemical production.
The chapter details the process and gives the trend of growing share of coal in the petrochemical
capacity. It contains the example of coal-based vinyl chloride monomer (VCM) production in
China. It also highlights the rising global interest in coal gasification processes for petrochemical
production.

- Chapter 5 contains analysis of the growth of petrochemicals demand in China. It illustrates that
China’s demand growth with the example of major polymers. The chapter also highlights certain
major industries driving the demand in China.

- Chapter 6 contains detailed analysis of the contribution of the packaging industry to global
petrochemical demand. It highlights key properties of plastic packaging that drive the demand. It
also analyses the role of the major packaging segment, that is, food and beverage packaging, in
global petrochemical demand.

- Chapter 7 contains a detailed explanation of the emergence of the Middle East as a major
global supplier. It analyses the role of abundant feedstock availability in the growth of the Middle
East’s petrochemical industry. It also compares the low petrochemical prices in the Middle East
with those in other regions.

- Chapter 8 contains a detailed analysis on the price trend of petrochemicals with the example of
the prices of basic aromatics and basic olefins. It also gives the forecast prices for these
petrochemicals.

- Chapter 9 contains an illustration of the impact of growing carbon emissions on the
petrochemical industry. It also includes key regulatory measures in the US, Europe and China.

- Chapter 10 contains details of the slow growth of market in North America and Western Europe.
It analysis different factors causing the petrochemical demand growth to slow down in these
regions.

- Chapter 11 contains an illustration of the consolidation trend in North American and Western
Europe petrochemical industry. It explains the petrochemical deals trend in all regions. The
chapter also contains description of the top 10 petrochemical deals taken place in the year 2010.

- Chapter 12 contains detailed analysis of the growing competitiveness of Asia-Pacific’s
petrochemical producers. It explains the factors and highlights the key expansion projects in
Asia-Pacific.

4.1 VCM capacity based on coal feedstock is expected to increase in China :

China has around XX VCM plants, which is the most of any country in the world. More than
two thirds of the Chinese VCM capacity uses acetylene as a raw material for VCM
production. Around XX% of VCM is utilized for the production of PVC. The remaining XX%
is mostly consumed in polyvinylidene chloride and chlorinated solvents. The rapidly
growing market of PVC is responsible for the surge in for VCM.

The production of VCM through the calcium carbide and acetylene route has flourished in
China, due to the availability of low cost coal and power. The process and technology for
VCM production from acetylene is also available locally in China. All the equipment and
related systems for the process, including acetylene generators, is also available locally.
Currently, a number of local Chinese engineering institutes are able to provide the
acetylene product chain process design and calcium carbide technology and equipment.
Coal-to-VCM production technology is growing to be very competitive in China.

The following figure explains the growing use of coal as the basic feedstock for the
production of PVC in China. In other words, it shows the growing use of acetylene-based
VCM as the raw material for PVC production.

8.2 The olefins price is expected to rise by around 6.2% in 2011 :

The olefins have an even higher correlation with the crude oil prices. Ethylene prices have
a correlation of XX% with the crude oil price. Propylene prices have a correlation of
XX% and butadiene prices have a correlation of XX% with the crude oil price. The following
figure shows the historical trend of the process of basic olefins in correlation with the
crude oil. It also shows the forecast price trend to 2020.

The ethylene prices are expected to rise at an AAGR of XX% from 2011 to 2020. The
propylene prices are expected to rise at an AAGR of XX% over this period. The
butadiene prices are expected to rise at an AAGR of XX% from 2011 to 2020. In 2011, the
olefins price is expected to be higher by XX% from that in 2010. The overall olefins prices
are expected to rise at an AAGR of XX% between 2011 and 2020.

Disclaimer
All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted
in any form by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior permission of the publisher.

The facts of this report are believed to be correct at the time of publication but cannot be
guaranteed. Please note that the findings, conclusions and recommendations that the
publisher delivers will be based on information gathered in good faith from both primary
and secondary sources, whose accuracy we are not always in a position to guarantee.
As such the publisher accept no liability whatever for actions taken based on any
information that may subsequently prove to be incorrect.

To order this report, please send an email to mail@worldoils.com

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Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
Worldoils Oil, Gas and Offshore Marketplace    Worldoils Oil, Gas and Offshore Marketplace

Equipment ID   : 881
Equipment name   : Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
Category   : Research Reports
Specifications   : Name of the Report :
Top Ten Trends in the Petrochemical Industry in 2011

Publication date : December 2010

Petrochemicals capacity will continue to migrate to low-cost locations :

The North American petrochemical industry has traditionally held the number one position
in global petrochemical production as well as exports. The North American petrochemical
industry has gone through several phases in its lifecycle, starting from its initial growth and
capacity expansions to a stage of reduced marginal returns that led to it dealing with a
possible slump. The recent slowdown in the North American petrochemical industry has been
brought about by the increase in competition from price-competitive producers in the Middle
East and Asia. The opportunities for US commodity plastic exports, for instance, have reduced.
This is because a large volume of Middle East plastic export capacity with a significant cost
advantage is displacing other exporters in China, the US, Korea and Japan. Another major
reason is the resource constraints and high feedstock prices in North America. The rising
feedstock prices are forcing many North American petrochemical producers to reassess their
profit margins in comparison to that of global players.

The capacity additions in the global petrochemical industry are increasingly favoring Asia-Pacific
and Middle Eastern locations. The major reason for this shift is the economies of  production in
these regions. The Middle East has an unparalleled feedstock advantage and Asia-Pacific
countries like China and India offer very low labor costs compared to North American and
European countries.

Coal will grow as a key feedstock for petrochemicals production :

The major feedstock for petrochemicals production has historically been naphtha and natural
gas. Coal and Liquefied Petroleum Gas (LPG) is also used in the production of petrochemicals.
However, the use of coal as a feedstock for petrochemicals is becoming popular exceptionally 
quickly in China. There are two main drivers behind the push for more coal-to-gas projects in
China. One is the soaring demand for gas due to urbanization and environmental concerns,
and the other reason is that China has plenty of coal, while oil and gas are in short supply.
China is the biggest producers of many petrochemicals in the world. The increasing use of
coal feedstock in China is continuously increasing the share of coal-based petrochemicals
production globally.

China has, in the past few years, focused on developing coal-based liquid fuels as raw
materials in order to reduce its dependency on imported oil. With rising crude oil prices the
Chinese government has been eager to find ways to reduce oil imports. China has huge
reserves of coal and is the largest producer of coke in the world. Coke is produced by three
types of producers in China : captive coke production plants of iron-steel makers, coke plants
of chemical producers, and dedicated coke producers. The country has around XX producers
of coke with nearly XX of them having a large capacity. Due to the availability of low cost coal in
the country, it had been easy for many petrochemical manufacturers in the country to adopt
coal-based raw materials.

China will lead the demand growth of petrochemicals globally :

China has emerged as the biggest petrochemical market in the world. Petrochemical demand
growth is closely associated with the economic growth of a country, and China is the fastest
growing economy in the world. The GDP of China is growing at a rate much higher than that
of most other economies of the world. The country has successfully maintained its 8% growth
despite the impact of the global financial slowdown, while most large economies in the world
have witnessed a downturn. With a growing economy, rising per capita income in the country
also helps the petrochemical market to grow. Demand for petrochemicals in China is also
rising, with growth in the infrastructure and construction industry, packaging industry, textile
industry, automotive industry, the consumer goods and electronics markets, and many other
industries which are major markets for petrochemicals.

The rapidly growing packaging industry of China plays an important role in the growth of plastic
processing industry and the demand for petrochemicals in the country. The contribution of the
construction industry to China’s GDP also continues to grow. The growing infrastructure in
China is strongly driving the demand for petrochemicals. The strongest growth was observed
in the market for Polyvinyl Chloride (PVC), which is a very important chemical in the construction
sector, used largely for making pipes, window frames and sidings.

Table of Contents

1 Table of Contents ........4
1.1 List of Tables ........6
1.2 List of Figures ........7

2 Introduction ........8
2.1 Report Coverage ........8

3 Petrochemicals Capacity Will Continue to Migrate to Low-Cost
Locations........9
3.1 Cheap Labour and Rapidly Growing Domestic Markets are Driving
the Capacity Additions in Asia-Pacific ........12
3.2 Availability of Cheap and Abundant Feedstock Forces Capacity
Additions in the Middle East ........14

4 Coal Will Grow as a Key Feedstock for Petrochemicals Production ........15
4.1 VCM Capacity Based on Coal Feedstock is Expected to Increase in
China ........18
4.2 Interest in Coal Gasification Process for Petrochemicals Production Will
Increase ........20
4.3 Increasing Use of Coal Will Continue to Raise Environmental
Concerns ........20

5 China Will Lead the Demand Growth of Petrochemicals Globally ........21
5.1 The Giant Plastic Processing and Packaging Industry of China is the Major
Force Driving the Petrochemicals Demand ........24
5.2 Rapidly Growing Infrastructure and Construction Industry of China Will
Lead the Market to Grow ........26
5.3 The Robust Automotive Industry of China is Expected to Boost Growing
Demand in the Country ........28
5.4 Huge Textile Industry of China Will Help Growth in Consumption ........30

6 Packaging Industry Will Contribute to Demand Growth for Major
Petrochemicals Globally ........31
6.1 Major Characteristics of Plastic Packaging Which Will Drive Growth ........33
6.1.1 Convenience ........33
6.1.2 Barrier Protection and Cost-effectiveness ........33
6.1.3 Differentiation Through Design ........34
6.1.4 Smart Packaging ........34
6.2 Beverage and Food Packaging Continues to be the Major Market for
Petrochemicals in the Global Packaging Industry ........34

7 Feedstock Advantage Will Encourage the Growth in Downstream Petrochemical
Industry in Middle East ........36
7.1 Feedstock Advantage Will Lead the Growth in Petrochemical Capacity in the
Region ........36
7.2 Low-priced Raw Materials Will Help in the Diversification Strategy of the Middle
East Petrochemical Industry ........41
7.3 Key Upcoming Trends in Middle Eastern Petrochemical Industry ........41
7.3.1 Proximity to Growing Asian Markets Will Continue to Drive Middle East
Petrochemical Exports ........41
7.3.2 Constrained Supply of Gas-based Feedstock in the Region May Impact the Industry
Growth ........42
7.3.3 Delayed Execution of Projects Might Hinder Fast Industry Growth ........42

8 The Increasing Crude Oil Prices Will Lead to Rise in Petrochemical Prices ........43
8.1 The Price of Aromatics is Expected to Rise by Around 2.8% in 2011 .......44
8.2 The Olefins Price is Expected to Rise by Around 6.2% in 2011 ........46

9 Growing Carbon Emissions and Tightening Regulations Will Restrict the Industry
Growth ........48
9.1 Regulatory Measures ........54
9.1.1 Regulatory Measures in Europe ........54
9.1.2 Regulatory Measures in the US ........55
9.1.3 Regulatory Measures in China ........57

10 North American and Western European Petrochemical Demand Will Continue to
Lag ........59
10.1 The Share of North America and Europe in Global Petrochemical Demand Will
Reduce ........60

11 Petrochemical Industry in North America and Western Europe is Expected to Move
Towards Consolidation ........63
11.1 The Number of Acquisition Deals is Expected to Rise in North America and
Europe ........64
11.1.1 Inpex Announces Secondary Offering for $6.6 Billion ........68
11.1.2 Inergy Holdings to Merge With Inergy ........68
11.1.3 Sinopec Issues Convertible Bonds for $2.9 Billion ........69
11.1.4 LyondellBasell Completes Private Placement of 8% Senior Notes Due 2017 for
$2.75 Billion ........69
11.1.5 Lyondell Chemical Prices Private Placement of Senior Secured Notes for $2.75
Billion ........69
11.1.6 SABIC Announces Private Placement of $2.6 Billion ........70
11.1.7 Hyundai Heavy Industries to Acquire Additional 70% Stake in Hyundai
Oilbank ........70
11.1.8 BP Files Public Offering of Notes for around $2 Billion ........70
11.1.9 PEMEX Completes Private Placement of 5.5% Bonds Due 2021 for
$2,000m ........71
11.1.10 The Dow Chemical Issues 4.25% Senior Unsecured Notes Due 2020
for $1.75 Billion ........71

12 Increasing Capacity Will Lead to Enhanced Competitiveness of Asian Companies ........72
12.1 Economic and Feedstock Difficulties are Expected to Impact the Profitability of Producers
in North America and Europe ........72
12.2 The Growing Investments and Expansions Will Lead to Increased Competitiveness of the
Asian Petrochemical Producers ........74

List of Tables
Table 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million Tons,
2005-2015 ........10
Table 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Table 3 : PVC, Global, Capacity With Coal as a Feedstock, Million Tons, 2000-2020 ........17
Table 4 : PVC Production, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........19
Table 5 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........23
Table 6 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........25
Table 7 : PVC, China, Demand, Million Tons, %, 2000-2020 ........27
Table 8 : SBR, China, Demand, Million Tons, %, 2000-2020 ........29
Table 9 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........32
Table 10 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......33
Table 11 : Ethylene, Prices, $/Ton, 2000-2020 ........38
Table 12 : Propylene, Prices, $/Ton, 2000-2020 ........40
Table 13 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........45
Table 14 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........47
Table 15 : Petrochemical Production and CO2 Emissions, Global, Million
Tons, 2000-2018 ........49
Table 16 : Major Petrochemical Contributors to Carbon Emissions,
Global, %, 2010 ........51
Table 17 : CO2 Emissions by Region, Million Tons, 2000-2018 ........52
Table 18 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Table 19 : Major Polymers, North America, Europe, Rest of the World, Demand
Million Tons, 2000- 2020 ........61
Table 20 : Major Polymers, North America, Europe, Rest of the World, Demand
Share , %, 2010 and 2015 ........62
Table 21 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........64
Table 22 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Table 23 : Top 10 Deals in Petrochemical Industry, Global, 2010 ........67
Table 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........74

List of Figures
Figure 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million
Tons, 2005-2015 ........10
Figure 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Figure 3 : Coal to Petrochemicals, Value Chain ........15
Figure 4 : PVC, Global, Capacity Share With Coal as a Feedstock, %, 2000-2020 ........16
Figure 5 : PVC, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........18
Figure 6 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........22
Figure 7 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........24
Figure 8 : PVC, China, Demand Share, %, 2000-2020 ........26
Figure 9 : SBR, China, Demand Share, %, 2000-2020 ........28
Figure 10 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........31
Figure 11 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......32
Figure 12 : Ethylene, Prices, $/Ton, 2000-2020 ........37
Figure 13 : Propylene, Prices, $/Ton, 2000-2020 ........39
Figure 14 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........44
Figure 15 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........46
Figure 16 : Petrochemical Production and CO2 Emissions, Global, Million Tons,
2000-2018 ........48
Figure 17 : Major Petrochemical Contributors to Carbon Emissions, Global, 2010 .....50
Figure 18 : CO2 Emissions by Region, Million Tons, 2000-2018 ........51
Figure 19 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Figure 20 : Major Polymers, North America, Europe and the Rest of the World, Demand
Million Tons, 2000-2020 ........60
Figure 21 : Major Polymers, North America, Europe, Rest of the World, Demand Share,
%, 2010 and 2015 ........62
Figure 22 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........63
Figure 23 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Figure 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........ 72

2 Introduction

Petrochemicals are chemicals produced from petroleum, that is, crude oil and natural
gas. Petrochemicals are used in a variety of forms in different industries. The
petrochemical industry has been one of the most important commodity industries and
the backbone of many applications. The petrochemical industry is in a mature stage in
developed countries, whereas it is in a growth stage in the world’s developing economies.
The global petrochemical industry is witnessing a shift of power from the traditionally
dominant developed regions of the world to emerging economies in the developing
regions.

2.1 Report Coverage :

The coverage in this report is as follows :

- Chapter 3 contains detailed analysis of the shift of the global petrochemical capacity from
traditionally strong regions to emerging regions. It compares the capacity additions and planned
projects of major petrochemical companies in different regions. The chapter also gives an
explanation of the factors leading to the shift.

- Chapter 4 explains the trend of coal emerging as a major feedstock in petrochemical production.
The chapter details the process and gives the trend of growing share of coal in the petrochemical
capacity. It contains the example of coal-based vinyl chloride monomer (VCM) production in
China. It also highlights the rising global interest in coal gasification processes for petrochemical
production.

- Chapter 5 contains analysis of the growth of petrochemicals demand in China. It illustrates that
China’s demand growth with the example of major polymers. The chapter also highlights certain
major industries driving the demand in China.

- Chapter 6 contains detailed analysis of the contribution of the packaging industry to global
petrochemical demand. It highlights key properties of plastic packaging that drive the demand. It
also analyses the role of the major packaging segment, that is, food and beverage packaging, in
global petrochemical demand.

- Chapter 7 contains a detailed explanation of the emergence of the Middle East as a major
global supplier. It analyses the role of abundant feedstock availability in the growth of the Middle
East’s petrochemical industry. It also compares the low petrochemical prices in the Middle East
with those in other regions.

- Chapter 8 contains a detailed analysis on the price trend of petrochemicals with the example of
the prices of basic aromatics and basic olefins. It also gives the forecast prices for these
petrochemicals.

- Chapter 9 contains an illustration of the impact of growing carbon emissions on the
petrochemical industry. It also includes key regulatory measures in the US, Europe and China.

- Chapter 10 contains details of the slow growth of market in North America and Western Europe.
It analysis different factors causing the petrochemical demand growth to slow down in these
regions.

- Chapter 11 contains an illustration of the consolidation trend in North American and Western
Europe petrochemical industry. It explains the petrochemical deals trend in all regions. The
chapter also contains description of the top 10 petrochemical deals taken place in the year 2010.

- Chapter 12 contains detailed analysis of the growing competitiveness of Asia-Pacific’s
petrochemical producers. It explains the factors and highlights the key expansion projects in
Asia-Pacific.

4.1 VCM capacity based on coal feedstock is expected to increase in China :

China has around XX VCM plants, which is the most of any country in the world. More than
two thirds of the Chinese VCM capacity uses acetylene as a raw material for VCM
production. Around XX% of VCM is utilized for the production of PVC. The remaining XX%
is mostly consumed in polyvinylidene chloride and chlorinated solvents. The rapidly
growing market of PVC is responsible for the surge in for VCM.

The production of VCM through the calcium carbide and acetylene route has flourished in
China, due to the availability of low cost coal and power. The process and technology for
VCM production from acetylene is also available locally in China. All the equipment and
related systems for the process, including acetylene generators, is also available locally.
Currently, a number of local Chinese engineering institutes are able to provide the
acetylene product chain process design and calcium carbide technology and equipment.
Coal-to-VCM production technology is growing to be very competitive in China.

The following figure explains the growing use of coal as the basic feedstock for the
production of PVC in China. In other words, it shows the growing use of acetylene-based
VCM as the raw material for PVC production.

8.2 The olefins price is expected to rise by around 6.2% in 2011 :

The olefins have an even higher correlation with the crude oil prices. Ethylene prices have
a correlation of XX% with the crude oil price. Propylene prices have a correlation of
XX% and butadiene prices have a correlation of XX% with the crude oil price. The following
figure shows the historical trend of the process of basic olefins in correlation with the
crude oil. It also shows the forecast price trend to 2020.

The ethylene prices are expected to rise at an AAGR of XX% from 2011 to 2020. The
propylene prices are expected to rise at an AAGR of XX% over this period. The
butadiene prices are expected to rise at an AAGR of XX% from 2011 to 2020. In 2011, the
olefins price is expected to be higher by XX% from that in 2010. The overall olefins prices
are expected to rise at an AAGR of XX% between 2011 and 2020.

Disclaimer
All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted
in any form by any means, electronic, mechanical, photocopying, recording or otherwise,
without the prior permission of the publisher.

The facts of this report are believed to be correct at the time of publication but cannot be
guaranteed. Please note that the findings, conclusions and recommendations that the
publisher delivers will be based on information gathered in good faith from both primary
and secondary sources, whose accuracy we are not always in a position to guarantee.
As such the publisher accept no liability whatever for actions taken based on any
information that may subsequently prove to be incorrect.

To order this report, please send an email to mail@worldoils.com

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Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
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Equipment ID   : 881
Equipment name   : Top Ten Trends in the Petrochemical Industry in 2011 - Research Report
Category   : Research Reports
 
Specifications  :
Name of the Report :
Top Ten Trends in the Petrochemical Industry in 2011

Publication date : December 2010

Petrochemicals capacity will continue to migrate to low-cost locations :

The North American petrochemical industry has traditionally held the number one position
in global petrochemical production as well as exports. The North American petrochemical
industry has gone through several phases in its lifecycle, starting from its initial growth and
capacity expansions to a stage of reduced marginal returns that led to it dealing with a
possible slump. The recent slowdown in the North American petrochemical industry has been
brought about by the increase in competition from price-competitive producers in the Middle
East and Asia. The opportunities for US commodity plastic exports, for instance, have reduced.
This is because a large volume of Middle East plastic export capacity with a significant cost
advantage is displacing other exporters in China, the US, Korea and Japan. Another major
reason is the resource constraints and high feedstock prices in North America. The rising
feedstock prices are forcing many North American petrochemical producers to reassess their
profit margins in comparison to that of global players.

The capacity additions in the global petrochemical industry are increasingly favoring Asia-Pacific
and Middle Eastern locations. The major reason for this shift is the economies of  production in
these regions. The Middle East has an unparalleled feedstock advantage and Asia-Pacific
countries like China and India offer very low labor costs compared to North American and
European countries.

Coal will grow as a key feedstock for petrochemicals production :

The major feedstock for petrochemicals production has historically been naphtha and natural
gas. Coal and Liquefied Petroleum Gas (LPG) is also used in the production of petrochemicals.
However, the use of coal as a feedstock for petrochemicals is becoming popular exceptionally 
quickly in China. There are two main drivers behind the push for more coal-to-gas projects in
China. One is the soaring demand for gas due to urbanization and environmental concerns,
and the other reason is that China has plenty of coal, while oil and gas are in short supply.
China is the biggest producers of many petrochemicals in the world. The increasing use of
coal feedstock in China is continuously increasing the share of coal-based petrochemicals
production globally.

China has, in the past few years, focused on developing coal-based liquid fuels as raw
materials in order to reduce its dependency on imported oil. With rising crude oil prices the
Chinese government has been eager to find ways to reduce oil imports. China has huge
reserves of coal and is the largest producer of coke in the world. Coke is produced by three
types of producers in China : captive coke production plants of iron-steel makers, coke plants
of chemical producers, and dedicated coke producers. The country has around XX producers
of coke with nearly XX of them having a large capacity. Due to the availability of low cost coal in
the country, it had been easy for many petrochemical manufacturers in the country to adopt
coal-based raw materials.

China will lead the demand growth of petrochemicals globally :

China has emerged as the biggest petrochemical market in the world. Petrochemical demand
growth is closely associated with the economic growth of a country, and China is the fastest
growing economy in the world. The GDP of China is growing at a rate much higher than that
of most other economies of the world. The country has successfully maintained its 8% growth
despite the impact of the global financial slowdown, while most large economies in the world
have witnessed a downturn. With a growing economy, rising per capita income in the country
also helps the petrochemical market to grow. Demand for petrochemicals in China is also
rising, with growth in the infrastructure and construction industry, packaging industry, textile
industry, automotive industry, the consumer goods and electronics markets, and many other
industries which are major markets for petrochemicals.

The rapidly growing packaging industry of China plays an important role in the growth of plastic
processing industry and the demand for petrochemicals in the country. The contribution of the
construction industry to China’s GDP also continues to grow. The growing infrastructure in
China is strongly driving the demand for petrochemicals. The strongest growth was observed
in the market for Polyvinyl Chloride (PVC), which is a very important chemical in the construction
sector, used largely for making pipes, window frames and sidings.

Table of Contents

1 Table of Contents ........4
1.1 List of Tables ........6
1.2 List of Figures ........7

2 Introduction ........8
2.1 Report Coverage ........8

3 Petrochemicals Capacity Will Continue to Migrate to Low-Cost
Locations........9
3.1 Cheap Labour and Rapidly Growing Domestic Markets are Driving
the Capacity Additions in Asia-Pacific ........12
3.2 Availability of Cheap and Abundant Feedstock Forces Capacity
Additions in the Middle East ........14

4 Coal Will Grow as a Key Feedstock for Petrochemicals Production ........15
4.1 VCM Capacity Based on Coal Feedstock is Expected to Increase in
China ........18
4.2 Interest in Coal Gasification Process for Petrochemicals Production Will
Increase ........20
4.3 Increasing Use of Coal Will Continue to Raise Environmental
Concerns ........20

5 China Will Lead the Demand Growth of Petrochemicals Globally ........21
5.1 The Giant Plastic Processing and Packaging Industry of China is the Major
Force Driving the Petrochemicals Demand ........24
5.2 Rapidly Growing Infrastructure and Construction Industry of China Will
Lead the Market to Grow ........26
5.3 The Robust Automotive Industry of China is Expected to Boost Growing
Demand in the Country ........28
5.4 Huge Textile Industry of China Will Help Growth in Consumption ........30

6 Packaging Industry Will Contribute to Demand Growth for Major
Petrochemicals Globally ........31
6.1 Major Characteristics of Plastic Packaging Which Will Drive Growth ........33
6.1.1 Convenience ........33
6.1.2 Barrier Protection and Cost-effectiveness ........33
6.1.3 Differentiation Through Design ........34
6.1.4 Smart Packaging ........34
6.2 Beverage and Food Packaging Continues to be the Major Market for
Petrochemicals in the Global Packaging Industry ........34

7 Feedstock Advantage Will Encourage the Growth in Downstream Petrochemical
Industry in Middle East ........36
7.1 Feedstock Advantage Will Lead the Growth in Petrochemical Capacity in the
Region ........36
7.2 Low-priced Raw Materials Will Help in the Diversification Strategy of the Middle
East Petrochemical Industry ........41
7.3 Key Upcoming Trends in Middle Eastern Petrochemical Industry ........41
7.3.1 Proximity to Growing Asian Markets Will Continue to Drive Middle East
Petrochemical Exports ........41
7.3.2 Constrained Supply of Gas-based Feedstock in the Region May Impact the Industry
Growth ........42
7.3.3 Delayed Execution of Projects Might Hinder Fast Industry Growth ........42

8 The Increasing Crude Oil Prices Will Lead to Rise in Petrochemical Prices ........43
8.1 The Price of Aromatics is Expected to Rise by Around 2.8% in 2011 .......44
8.2 The Olefins Price is Expected to Rise by Around 6.2% in 2011 ........46

9 Growing Carbon Emissions and Tightening Regulations Will Restrict the Industry
Growth ........48
9.1 Regulatory Measures ........54
9.1.1 Regulatory Measures in Europe ........54
9.1.2 Regulatory Measures in the US ........55
9.1.3 Regulatory Measures in China ........57

10 North American and Western European Petrochemical Demand Will Continue to
Lag ........59
10.1 The Share of North America and Europe in Global Petrochemical Demand Will
Reduce ........60

11 Petrochemical Industry in North America and Western Europe is Expected to Move
Towards Consolidation ........63
11.1 The Number of Acquisition Deals is Expected to Rise in North America and
Europe ........64
11.1.1 Inpex Announces Secondary Offering for $6.6 Billion ........68
11.1.2 Inergy Holdings to Merge With Inergy ........68
11.1.3 Sinopec Issues Convertible Bonds for $2.9 Billion ........69
11.1.4 LyondellBasell Completes Private Placement of 8% Senior Notes Due 2017 for
$2.75 Billion ........69
11.1.5 Lyondell Chemical Prices Private Placement of Senior Secured Notes for $2.75
Billion ........69
11.1.6 SABIC Announces Private Placement of $2.6 Billion ........70
11.1.7 Hyundai Heavy Industries to Acquire Additional 70% Stake in Hyundai
Oilbank ........70
11.1.8 BP Files Public Offering of Notes for around $2 Billion ........70
11.1.9 PEMEX Completes Private Placement of 5.5% Bonds Due 2021 for
$2,000m ........71
11.1.10 The Dow Chemical Issues 4.25% Senior Unsecured Notes Due 2020
for $1.75 Billion ........71

12 Increasing Capacity Will Lead to Enhanced Competitiveness of Asian Companies ........72
12.1 Economic and Feedstock Difficulties are Expected to Impact the Profitability of Producers
in North America and Europe ........72
12.2 The Growing Investments and Expansions Will Lead to Increased Competitiveness of the
Asian Petrochemical Producers ........74

List of Tables
Table 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million Tons,
2005-2015 ........10
Table 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Table 3 : PVC, Global, Capacity With Coal as a Feedstock, Million Tons, 2000-2020 ........17
Table 4 : PVC Production, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........19
Table 5 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........23
Table 6 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........25
Table 7 : PVC, China, Demand, Million Tons, %, 2000-2020 ........27
Table 8 : SBR, China, Demand, Million Tons, %, 2000-2020 ........29
Table 9 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........32
Table 10 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......33
Table 11 : Ethylene, Prices, $/Ton, 2000-2020 ........38
Table 12 : Propylene, Prices, $/Ton, 2000-2020 ........40
Table 13 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........45
Table 14 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........47
Table 15 : Petrochemical Production and CO2 Emissions, Global, Million
Tons, 2000-2018 ........49
Table 16 : Major Petrochemical Contributors to Carbon Emissions,
Global, %, 2010 ........51
Table 17 : CO2 Emissions by Region, Million Tons, 2000-2018 ........52
Table 18 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Table 19 : Major Polymers, North America, Europe, Rest of the World, Demand
Million Tons, 2000- 2020 ........61
Table 20 : Major Polymers, North America, Europe, Rest of the World, Demand
Share , %, 2010 and 2015 ........62
Table 21 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........64
Table 22 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Table 23 : Top 10 Deals in Petrochemical Industry, Global, 2010 ........67
Table 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........74

List of Figures
Figure 1 : Ethylene and its Major Derivatives, Capacity Additions by Region, Million
Tons, 2005-2015 ........10
Figure 2 : Major Polymers, Capacity Additions by Region, Million Tons, 2005-2015 ........11
Figure 3 : Coal to Petrochemicals, Value Chain ........15
Figure 4 : PVC, Global, Capacity Share With Coal as a Feedstock, %, 2000-2020 ........16
Figure 5 : PVC, China, Capacity by Feedstock, Million Tons Per Year, 2000-2020 ........18
Figure 6 : Major Polymers, China, Demand, Million Tons, 2000-2020 ........22
Figure 7 : Major Olefins, China, Demand, Million Tons, 2000-2020 ........24
Figure 8 : PVC, China, Demand Share, %, 2000-2020 ........26
Figure 9 : SBR, China, Demand Share, %, 2000-2020 ........28
Figure 10 : Major Polymers, Global, Demand by End Use, Million Tons, 2000-2020 ........31
Figure 11 : Major Polymers, Global, Demand Share by End Use, %, 2000-2020 .......32
Figure 12 : Ethylene, Prices, $/Ton, 2000-2020 ........37
Figure 13 : Propylene, Prices, $/Ton, 2000-2020 ........39
Figure 14 : Basic Aromatics, Global, Prices, $/Ton, 2000-2020 ........44
Figure 15 : Basic Olefins, Global, Prices, $/Ton, 2000-2020 ........46
Figure 16 : Petrochemical Production and CO2 Emissions, Global, Million Tons,
2000-2018 ........48
Figure 17 : Major Petrochemical Contributors to Carbon Emissions, Global, 2010 .....50
Figure 18 : CO2 Emissions by Region, Million Tons, 2000-2018 ........51
Figure 19 : CO2 Emissions by Region, Share, %, 2010 and 2015 ........53
Figure 20 : Major Polymers, North America, Europe and the Rest of the World, Demand
Million Tons, 2000-2020 ........60
Figure 21 : Major Polymers, North America, Europe, Rest of the World, Demand Share,
%, 2010 and 2015 ........62
Figure 22 : Deals in Petrochemical Industry by Type, Global, Share, %, 2010 ........63
Figure 23 : Petrochemical Deals by Region, %, 2009 and 2010 ........66
Figure 24 : Asian vs. Global Petrochemical Companies, Share by Petrochemical
Capacity , %, 2005-2015 ........ 72

2 Introduction

Petrochemicals are chemicals produced from petroleum, that is, crude oil and natural
gas. Petrochemicals are used in a variety of forms in different industries. The
petrochemical industry has been one of the most important commodity industries and
the backbone of many applications. The petrochemical industry is in a mature stage in
developed countries, whereas it is in a growth stage in the world’s developing economies.
The global petrochemical industry is witnessing a shift of power from the traditionally
dominant developed regions of the world to emerging economies in the developing
regions.

2.1 Report Coverage :

The coverage in this report is as follows :

- Chapter 3 contains detailed analysis of the shift of the global petrochemical capacity from
traditionally strong regions to emerging regions. It compares the capacity additions and planned
projects of major petrochemical companies in different regions. The chapter also gives an
explanation of the factors leading to the shift.

- Chapter 4 explains the trend of coal emerging as a major feedstock in petrochemical production.
The chapter details the process and gives the trend of growing share of coal in the petrochemical
capacity. It contains the example of coal-based vinyl chloride monomer (VCM) production in
China. It also highlights the rising global interest in coal gasification processes for petrochemical
production.

- Chapter 5 contains analysis of the growth of petrochemicals demand in China. It illustrates that
China’s demand growth with the example of major polymers. The chapter also highlights certain
major industries driving the demand in China.

- Chapter 6 contains detailed analysis of the contribution of the packaging industry to global
petrochemical demand. It highlights key properties of plastic packaging that drive the demand. It
also analyses the role of the major packaging segment, that is, food and beverage packaging, in
global petrochemical demand.

- Chapter 7 contains a detailed explanation of the emergence of the Middle East as a major
global supplier. It analyses the role of abundant feedstock availability in the growth of the Middle
East’s petrochemical industry. It also compares the low petrochemical prices in the Middle East
with those in other regions.

- Chapter 8 contains a detailed analysis on the price trend of petrochemicals with the example of
the prices of basic aromatics and basic olefins. It also gives the forecast prices for these
petrochemicals.

- Chapter 9 contains an illustration of the impact of growing carbon emissions on the
petrochemical industry. It also includes key regulatory measures in the US, Europe and China.

- Chapter 10 contains details of the slow growth of market in North America and Western Europe.
It analysis different factors causing the petrochemical demand growth to slow down in these
regions.

- Chapter 11 contains an illustration of the consolidation trend in North American and Western
Europe petrochemical industry. It explains the petrochemical deals trend in all regions. The
chapter also contains description of the top 10 petrochemical deals taken place in the year 2010.

- Chapter 12 contains detailed analysis of the growing competitiveness of Asia-Pacific’s
petrochemical producers. It explains the factors and highlights the key expansion projects in
Asia-Pacific.

4.1 VCM capacity based on coal feedstock is expected to increase in China :

China has around XX VCM plants, which is the most of any country in the world. More than
two thirds of the Chinese VCM capacity uses acetylene as a raw material for VCM
production. Around XX% of VCM is utilized for the production of PVC. The remaining XX%
is mostly consumed in polyvinylidene chloride and chlorinated solvents. The rapidly
growing market of PVC is responsible for the surge in for VCM.

The production of VCM through the calcium carbide and acetylene route has flourished in
China, due to the availability of low cost coal and power. The process and technology for
VCM production from acetylene is also available locally in China. All the equipment and
related systems for the process, including acetylene generators, is also available locally.
Currently, a number of local Chinese engineering institutes are able to provide the
acetylene product chain process design and calcium carbide technology and equipment.
Coal-to-VCM production technology is growing to be very competitive in China.

The following figure explains the growing use of coal as the basic feedstock for the
production of PVC in China. In other words, it shows the growing use of acetylene-based
VCM as the raw material for PVC production.

8.2 The olefins price is expected to rise by around 6.2% in 2011 :

The olefins have an even higher correlation with the crude oil prices. Ethylene prices have
a correlation of XX% with the crude oil price. Propylene prices have a correlation of
XX% and butadiene prices have a correlation of XX% with the crude oil price. The following
figure shows the historical trend of the process of basic olefins in correlation with the
crude oil. It also shows the forecast price trend to 2020.

The ethylene prices are expected to rise at an AAGR of XX% from 2011 to 2020. The
propylene prices are expected to rise at an AAGR of XX% over this period. The
butadiene prices are expected to rise at an AAGR of XX% from 2011 to 2020. In 2011, the
olefins price is expected to be higher by XX% from that in 2010. The overall olefins prices
are expected to rise at an AAGR of XX% between 2011 and 2020.

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guaranteed. Please note that the findings, conclusions and recommendations that the
publisher delivers will be based on information gathered in good faith from both primary
and secondary sources, whose accuracy we are not always in a position to guarantee.
As such the publisher accept no liability whatever for actions taken based on any
information that may subsequently prove to be incorrect.

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