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GCC National Ethylene Producer Investment Targets Overseas

 Last Update: 2022-08-21
 Source: Internet
 Author: User

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The cost advantage of local raw materials gradually disappears

According to the latest report of the Gulf Petroleum and Chemicals Association (GPCA), the production capacity of ethylene and related products in the Middle East Gulf Cooperation Council (GCC) countries will continue to increase rapidly

Production capacity of ethylene-related products increased sharply

In the future, it is a foregone conclusion that the production capacity of ethylene in the Gulf will increase substantially

At the same time, the production capacity of ethylene derivatives will also increase, although it will not be higher than the growth rate of ethylene, but it will still maintain considerable growth

Changes in raw materials weaken cost advantages

While ethylene and its derivatives production capacity is rising, cracking feedstocks in GCC countries are changing, eroding the region's cost advantage

The GPCA expects that the share of ethylene producers in GCC countries using ethane as a feedstock will fall from 70.
7% in 2018 to 67.
3% in 2028 due to reduced supply

The GPCA warns that in 2018, the cost of ethylene production in GCC countries was 30% lower than the global average, and in 2013 the cost of ethylene production in the region was 60% lower than the global average

Increase investment outside the region

The GPCA report pointed out that the shortage of advantageous raw materials has forced producers to pay more and more attention to investment outside the region

The GCC countries' focus on China and North America is also for cost reasons

At the same time, due to the limited demand in the local market, ethylene produced in GCC countries will also be exported in large quantities
.
The GPCA estimates that by 2029, a third of the ethylene produced by producers in the region will be exported to overseas markets
.
Taking into account the increase in overseas projects, the share of ethylene produced by producers in the region will increase from 20% in 2018 to 25% in 2027
.

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