Issue 21/2018 - Global Chemicals Quick Facts

Global Chemicals Quick Review

In the short term, there will still be a shortage of styrene worldwide

At the annual meeting of the European Petrochemical Association (EPCA) in Vienna, Austria, in early October, industry players discussed
the global supply of styrene and the possibility of new plants in the near future.
ICIS said it will take some time for China's new styrene plant to be completed and put into operation, and new supply from the rest of the world is very limited
.
At the same time, some older styrene plants in Europe and the United States will continue to shut down unplanned, there will be supply shortages in the market, utilization rates are at historic high levels (90% of global styrene plant runs in 2018) and prices will continue to fluctuate
significantly.
Despite the slowdown in market demand, capacity growth has been more limited
.
As a result, producers reap significant profit margins, while buyers face price uncertainty
.

Energy reform is about the future fate of Mexico's petrochemical industry

Mexico's energy reform aims to open up the oil and gas sector to private and foreign-invested companies and to promote the growth of
oil and gas production.
Since its approval in 2014, Mexico's energy reform has played an important role
in creating clearer incentives for future petrochemical investments in the country and reducing feedstock risks.
Reforms have begun to reshape Mexico's energy market, but the process has not gone well
.
The collapse in international crude oil prices in 2014 led to a weakening of investor interest in Mexico's oil and gas sector and a slowdown
in the implementation of energy reforms.
Raul Arias Alvarez, chemical business advisor at IHS Markit, said: "The collapse in crude oil prices in 2014 hit Pemex's revenue, and the government's revenue was also greatly affected
.
" The successful implementation of the energy reform is crucial
for the future development of Mexico's petrochemical industry.

The Asia-Pacific oil and gas industry is expected to usher in a new round of rebound

Globally, there has been a significant increase in investment in new upstream projects in the oil and gas sector, and this trend has also penetrated into the Asia-Pacific region
.
According to Wood Mackenzie's latest report, the Asia-Pacific oil and gas industry is expected to rebound
in the coming year.
Wood Mackenzie said growing demand for liquefied natural gas (LNG) in Asia, the return of China's state-owned oil companies to growth mode and renewed interest in upstream investment were the main factors
affecting the rebound of the Asia-Pacific oil and gas industry.
Oil and gas M&A activity in Asia Pacific is recovering, with upstream oil and gas M&A in the region set to exceed $6.
8 billion in 2018, the highest level
since 2014.

Japan's Idemitsu Kosan and Showa Shell merger transaction concluded