Issue 19/2016 - Global Chemicals Quick Facts

Global Chemicals Quick Review

Two factors are helping to rekindle hope in the European petrochemical industry

The sharp drop in crude oil prices over the past two years has boosted the competitiveness
of European naphtha-based petrochemical producers and natural gas-based petrochemical producers such as the Middle East and the United States.
At the same time, the weakness of the euro has allowed European petrochemical producers to maintain their profitability
.
Despite the UK's decision to leave the EU, the European economy will continue to recover, which will help the European petrochemical industry out of trouble
.
Future energy costs remain a concern
for the European petrochemical industry.
At the same time, regulatory and environmental pressures will also hinder the development of
the European petrochemical industry.
Vanthoff, Shell's executive vice president for global chemicals, said: "The fall in oil prices has narrowed the competitive gap
between European petrochemical producers using naphtha and low-cost ethane in countries and regions such as the Middle East and the United States.
”

The wave of mergers and acquisitions in the agrochemical sector has raised concerns among regulators

Since last December, six major agrochemical companies have agreed to merge and will create three global agrochemical giants
.
In addition to the DuPont and Dow mergers, Monsanto has agreed to merge with Bayer, and ChemChina has also agreed to acquire Syngenta
.
However, the wave of mergers and acquisitions has raised concerns among regulators, which may be detrimental to market competition and innovation
.
Executives at agrochemical and seed companies are trying to convince skeptical lawmakers that the recent wave of mergers and acquisitions will not hurt farmers by causing agrochemical prices to rise or stifling innovation
.
James C.
Collins, DuPont's executive vice president for agriculture, said in testimony before the U.
S.
Senate Judiciary Committee: "The DuPont-Dow merger is good for
farmers.
Because it will create an agricultural leader in the Americas, increase global competitiveness, and enable U.
S.
farmers to improve productivity and profitability
.
”