Issue 11/2017 - Global Chemicals Quick Facts

Global Chemicals Quick Review

Global demand for high-performance base stocks continues to grow rapidly

Industry insiders said that driven by the renewal of passenger cars and the shift to synthetic and semi-synthetic lubricants, global demand for high-performance base stocks will continue to grow at a high rate
in the next decade.
According to Klein & Company, global base oil demand in 2015 reached 36 million tonnes, of which around 3 million tonnes were used to blend synthetic and semi-synthetic lubricants
.
Gabriel Tarle, senior analyst at Klein & Company, said: "In the past 5~10 years, the supply of high-performance base oils has seen a surprising increase
.
Over the past five years, API Group II and III base stocks have increased from 30% of the global base oil market to nearly 50% in 2015, and this share will continue to increase
rapidly.
”

Japanese chemical companies generally increased their earnings

Most of Japan's largest chemical companies saw profits increase
in the fiscal year ended March 31 due to improved economic conditions in the U.
S.
and Europe, the closure of loss-making units, and the aggressive expansion of Japanese companies in the international business.
Mitsui Chemicals achieved a profit of USD 582 million in the last fiscal year, a significant increase of 182.
4%
year-on-year.
Mitsui Chemicals said that the company's sharp profit growth in the last fiscal year was mainly due to the company's optimization of the domestic production system, efforts to maintain stable production and operation, basically in full production
.
In addition, the company recently shut down its urea plant and phenol production plant
in Japan.
Last fiscal year, Japan's Mitsubishi Chemical's profit increased by 204.
3%
year-on-year.
Mitsubishi Chemical said the main reason for the sharp increase in profits last fiscal year was the lower-than-expected
cost of exiting the purified terephthalic acid (PTA) business in India and China last year.

The outlook for global independent oil and gas exploration and production companies remains positive

The latest report from Moody's Investors Service shows that the outlook for independent global oil and gas exploration and production companies remains promising
.
The increase in oil and gas production, the rebound of oil and gas prices and effective cost control will help independent oil and gas companies maintain healthy profit growth
in the next 12~18 months.
Amol Joshi, vice president of Moody's Investors Service, said: "EBITDA for the global independent oil and gas exploration and production industry is expected to increase by 20%~30% in 2017, and the industry's EBITDA fell by about 25% in 2016 and about 45%
in 2015.
Due to increased capital expenditures and improved drilling efficiency, in addition to oil and gas prices being rebounding from their lows, oil and gas production by independent oil and gas exploration and production companies will increase by an average of about 5%
in 2017.
”