The hottest Asian petrochemical enterprises rush t

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Asian petrochemical enterprises are flocking to upgrade high-end products or surplus in the industrial chain

as low-end products are impacted by low-cost ethylene in the United States, petrochemical enterprises have chosen to invest billions of dollars in Asia to upgrade the industrial chain, but this may cause the risk of excess high-end products in Asia

it is reported that enterprises including Formosa Plastics and petrochemicals in Taiwan, lottechemical in Korea, Royal Dutch/Shell Petroleum 1 and the serious implementation of major resolutions of China Plastics Association have invested in large-scale special chemical product production capacity near major demand growth centers such as China. This strategy may be useful for one enterprise, but if most enterprises follow it, it will be self defeating

due to the slowdown in demand growth caused by the economic downturn, Asian petrochemical manufacturers are in a dilemma

the low price of ethylene in the United States has forced Asian manufacturers to reconsider their product portfolio. Ethylene is the basic material of plastics and textiles. The cost of producing ethylene from shale gas in the United States using the average value as the hardness value of the test piece is nearly half lower than that from naphtha in Asia

however, it is not without risks to migrate to the high end of the industrial chain. Asian companies must make enough profits on high-end products to offset the losses caused by selling ethylene at a loss. At present, the price of high-end chemical products is twice that of ethylene, which accounts for about one third of the output of Asian enterprises. As the supply of high-end products increases, the price difference between these products and ethylene may narrow

according to baek young Chan, senior analyst of Hyundai securities, by 2015, the global new paraxylene production capacity will more than double to 5.98 million tons, far higher than the demand growth of 4.2 million tons. P-xylene is an important raw material for the production of synthetic fiber, and its raw material is aromatic compounds

According to baek, in 2011, the production capacity increased by 2.3 million tons and the demand increased by 3.07 million tons

in the next three to four years, the advantages of the American recycled plastic granulator will also enable it to continue its development. It is expected that up to 16 shale gas plants will be built, some of which will be built by Asian enterprises. However, the ethane produced from shale gas cannot produce high-end chemical products such as paraxylene and butadiene from naphtha

in order to obtain low-cost ethylene, Asian petrochemical enterprises have started to establish cracking plants in the United States and other regions

Formosa Plastics, Lotte chemical and LG Chemical, the top three chemical enterprises in Asia, all plan to establish ethane cracking plants in the United States, Uzbekistan and Kazakhstan. By 2017, the total annual production capacity will reach 2million tons. Cracking unit can convert ethane separated from natural gas into ethylene

Hanhua Petrochemical is also discussing with the other party the possibility of establishing an ethane cracking plant in the United States. Hanhua petrochemical and Dalin industry jointly operate the third largest private petrochemical enterprise in Asia - Korea Lichuan naphtha cracking Center (yncc)

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