Fewer New Polyolefin Capacities in 2011 as Compared to Massive Number that Came Onstream in 201006 Jan 2011 • by Natalie Aster
Looking ahead to the year 2011, there appears to be far fewer new polyolefins capacities to watch out as compared to the massive number of new complexes which came onstream in 2010. Based on reports gathered thus far on ChemOrbis Production News, China will see around three new PP plants starting up in 2011 versus the nine plants that were reported since the start of 2010. Included in the 2010 count is Zheizang Shaoxing Petrochemical Company’s new PP plant of 300,000 tpa which was completed in October of this year and is expected to begin start up at end 2010, according to a source at the company. Plants scheduled for 2011 include Petrochina Guangxi Qinzhou Petrochemical’s 200,000 tpa PP plant. According to a company source, the installation of the new plant was completed in November and trial runs began in December. Also included are Zhongyuan Petrochemical Co Ltd’s 100,000 tpa PP plant in Henan and Fushun Petrochemical’s 300,000 tpa PP plant at Liaoning which is scheduled to start up in the fourth quarter of next year. In Southeast Asia, five new PP plants were reported starting up in the year 2010 including ExxonMobil’s new 450,000 tpa plant which is straddling the start of the year 2011. However, according to ChemOrbis Production News, there is only one new plant scheduled in the region for the new year belonging to Tri Polyta in Indonesia with a capacity of 460-480,000 tpa which has been delayed from January to April.In the Middle East, the only PP plant reported to be coming onstream in 2011 is Saudi Kayan Petrochemical’s 500,000 tpa plant, which actually began trial runs in August and is expected to start at end 2010 to early 2011. This compares to three other PP plants started up in the region in 2010 including in Egypt.
In the PE market, Fushun Petrochemical will bring online new HDPE and LLDPE plants in Q4-2011 while four PE complexes were brought onstream in 2010 in China. In Southeast Asia, three new PE complexes were seen starting up in 2010 and there was an expansion at Chandra Asri. These plants include ExxonMobil’s plant which will be starting up late 2010 to early 2011, but on the horizon the only reported new capacity will be another expansion from Chandra Asri. Similarly the Middle East will see a significant reduction in the number of new plants coming in 2011 compared to 2010 with around six major PE projects started up in 2010. The only new project apart from Iranian plants is Saudi Kayan’s complex which was started up in the third quarter of 2010 and expected to be fully onstream in early 2011. Amir Kabir Petrochemical’s new LDPE plant was reportedly delayed to 2011 from the fourth quarter of 2010. Also, according to NPC, a new HDPE/LLDPE plant with a capacity of 300,000 tpa will start up from Mahabad Petrochemical and Kordestan Petrochemical will start up a 300,000 tpa LDPE plant in 2011.
Despite the clear slowdown in new capacity additions in 2011, players are still bracing themselves for the full impact of the 2010 start ups as this year’s new plants ramp up to full rates by next year. There are clearly mixed views throughout the industry as to the impact next year. Financial analysts at Morgan Stanley believe 2011 will be a strong year for margins and the start of a strong cycle for petrochemicals lasting through 2014. In a report the company said they expect the strongest period of ethylene demand growth in the past 20 years and said, “The credit crunch has halted infrastructure investment by industry titans, and the Middle East appears to be exhausting feedstock quotas. Thus, global capacity should grow at just 2.3% in 2011-14.” Others in the industry note, however, that the market has yet to see the real impact from plants started up in recent months. One trader pointed out that the market has yet to see full output from Borouge’s huge new complex hit the market. Likewise, Qatar Chemical’s new HDPE plant was just starting in November. In Southeast Asia, some of the plants in Thailand have had trouble getting to full speed due to environmental issues while in China new plants are expected to run at higher rates in 2011.