Economic downturn a challenge for SEA’s chemical producers

Chemical producers in Southeast Asia face a challenging situation when 4.05 million tons per year (tpy) of ethylene capacity come onstream by 2011, which is likely to overlap with an economic crisis that will impact domestic and export markets. Despite the extent of the economic downturn, the region still would have seen the start-up of the new capacity because the four crackers due onstream in Singapore and Thailand boast of competitive advantages. In Singapore, Shell Chemicals’ new 800,000 tpy cracker complex will use hydrowax as feedstock, a good substitute to naphtha on account of high oil prices. Shell’s proprietary Omega technology will also be used in a 750,000 tpy monoethylene glycol (MEG) facility. In Thailand, Thai Petrochemical Group PTT will use gas as feedstock for its one million tpy polyethylene (PE) cracker which is due online in the second quarter of 2010. By the second half of 2010, partners Dow Chemical and Siam Cement Group are set to start up their second cracker, Map Ta Phut Olefins. Thailand ships significant portions of its current petrochemical capacity, with 928,000 tons of 1.788 million tons of PE production going to overseas markets in 2007. Singapore finds itself competing more with the Middle East producers in the Chinese export market. (July 21, 2008)