CMAI: Middle East capacity will push PE market to oversupply
By David Hannon -- Purchasing, 12/11/2008 2:00:00 AM
According to a recent analysis by CMAI, the next wave of polyethylene capacity expected to come on-stream in the Middle East and Asia between 2009 and 2012 will create global oversupply conditions.
"Between 2008 and 2009, world polyethylene supply/demand balances will begin to transition as investments in new capacity from the Middle East and China in recent years begin to impact the market," CMAI reports. "Prices, which have recently been at historical highs, have had a positive effect on producer margins, with most of the energy-based cost increases being passed through to resin buyers."
CMAI also said exports from the Middle East will boom towards the end of the forecast period with Iran becoming a player in the global polyethylene market as new capacity comes online between 2009 and 2011.
"Prices are expected to subside from the historical highs experienced in 2008. This will cause global trade patterns to shift depending on regional demand and local production economics as resin flows out of the region to Asia and West Europe (and ultimately, the Americas)."
Most polyethylene prices were down 10¢/lb in October, according to Purchasingdata.com's most recent buyer survey. Buyers cited a decrease in natural gas and crude oil prices.
Polyethylene Demand Stays Strong
10/16/2008
Now Playing: 