Page 129 - CW E-Magazine (3-6-2025)

Point of View

Asian petrochemical industry faces severe
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AGROCEL challenges even as India remains an exception
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India’s leading manufacturer of Bromine offers Petrochemical Industry Conference (APIC) held in Bangkok, in May. Asia has been the key driver of petrochemical demand for most of the
The challenges facing the Asian petrochemicals industry and the prospects of a recovery were the major talking points at the Asian
last two decades, and it is the slowing down in the region that is at the heart of the industry’s travails. It stands to reason that any recovery –
Bromine, HBr, CaBr , NaBr whenever it comes – will be determined in the region.

There are other challenges facing the petrochemical industry, notably the plastics industry, and at the top of the list are the
n-Propyl Bromide 2 sustainability-related ones. How the region handles the rising amounts of plastics waste generated at end-of-life of myriad products, particularly
flexible packaging, will be shaped by regulations and will have implications for demand for virgin resins.There are rising expectations – from
consumers and regulators – for greater environmental responsibility on the part of the plastics industry and stakeholders have long way to go to
meet promises and goals.
Iso Propyl Bromide there is agreement that any which way this is bad for an industry that was amongst the first to globalise. Bilateral trade agreements that
It was no surprise that the ongoing tariff wars dominated discussions on the sidelines of APIC 2025. The situation is still very fluid but

Phosphorus Tribromide may be forged between nations will at best only partly make-up for the loss of markets for many producers.

Concerns over a global economic slowdown are real, and there was agreement that the petrochemicals industry is unlikely to emerge
unscathed. A lot of what it produces is tied to economic activity – housing starts, automotive purchase, spends on fast moving consumer
Phosphorus Oxybromide goods, etc. Indeed, the demand slowdown in China is attributed substantially to contraction in all of the above sectors, which has come on
top of significant over-investments in many value chains.

Ethyl-2-Bromobutyrate As would be expected, the most severely impacted are the high-cost producers, and many are in Asia.
The slowdown has had global consequences – depressing operating rates and squeezing margins – and prompted some rationalisation.

Japan – an ageing society and petrochemicals industry
1-Bromo,3-Chloropropane which still operates old, small, and uncompetitive ethylene crackers, has been unchanged, even as stiff competition in international markets
Japan’s petrochemical industry is possibly the most outdated and uncompetitive in the region. The essential structure of the industry,
(notably China) and falling domestic demand (largely due a declining and aging population) has limited operating rates.

Ethylene operating rates have been below 90% since May 2022, and last year dropped to around 80%. Ethylene production has fallen
almost every year since a high of 7.7-mt in 2007, and in 2023 was just 5.3-mt (capacity: 6.2-mtpa) – a level attained as far back as 1989!

A stiff target to attain carbon neutrality by 2050 is adding to the challenges Japan’spetrochemicals industry faces.

Thailand – the biggest in ASEAN
Thailand – which has the biggest petrochemical industry in ASEAN with an ethylene capacity of 5.5-mtpa (2024) – is also facing
the heat. About two-third of this capacity is based on naphtha, and these plants are in the high end of the ethylene cash cost curve. The
balance one-third is based on gas, and relatively better placed. No surprise then that many in the former lot are rethinking feedstock options,
including imports of ethane from the US. Several efforts are ongoing to ramp up infrastructure needed to facilitate such imports
(tank terminals, pipelines and specialised ocean carriers).

About half of Thailand’s petrochemicals output is consumed locally and the balance exported, and China has been a key market. But
Contact us for your requirements: the latter’s quest to raise self-sufficiency has had an impact, and petrochemical volumes shipped from Thailand to China have declined in
Marketing Office: recent years. The industry is pinning hopes of a recovery on investments from Chinese companies, partly in a bid to escape US tariffs, but
B-701-702, 7th Floor, Flexcel Park, 184-87, S.V. Road, Jogeshwari (West), Mumbai - 400 102. Maharashtra, India. much will depend on how US trade policie sevolve in coming months.
Tel: 022-62162800 / 26790871 w Email: info@agrocel.net w Website: www.agrocel.co.in
Petrochemical producers in Thailand are also rejigging portfolios for a greater play in specialities such as low-carbon polymers
Works: (e.g., made from bioethanol-derived ethylene), biopolymers (e.g., polylactic acid), and circular polymers. But these are niche materials, and
w Greater Rann of Kutch, Near Village Dhordo, Taluka Bhuj, Kutch - 370 510. Gujarat India. do not mitigate the fundamental weaknesses in the broader petrochemical industry.
w Survey No. 442-443, Near Village Avania, Ghogha Road, Bhavnagar - 364 002. Gujarat, India.

Chemical Weekly June 3, 2025 129

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