PRLog (Press Release) -
Dec 31, 2009 -
Recession is precipitating a long-term decline in the British petrochemicals industry, with producers cutting and consolidating capacity in 2009, according to BMI's latest UK Petrochemicals Report. In 2009, the UK had combined olefins capacities of 2.84mn tpa ethylene, 1.34mn tpa propylene and 180,000tpa butadiene. In the aromatics segment, the UK has plants with combined capacities of 1.25mn tpa benzene and 365,000tpa xylenes. These aromatic compounds are used to manufacture intermediate petrochemicals products, with the UK hosting 160,000tpa ethylbenzene (EB), 60,000tpa styrene monomer (SM) and 500,000tpa terephthalic acid. These feed polymer plants with combined capacities that include 70,000tpa polystyrene (PS) and 325,000tpa polyethylene terephthalate (PET). In the styrenics chain, the UK also has capacities of 150,000tpa styrene-butadiene rubber and 60,000tpa acrylonitrile-
butadienestyrene copolymer. In the polymers segment, the British petrochemicals industry has capacities totaling 820,000tpa PE and 495,000tpa PP. In the vinyl chloride chain, the country also hosts 300,000tpa vinyl chloride monomer (VCM) and 550,000tpa polyvinyl chloride (PVC) capacities. In the fertilizer sector, the UK possesses 1.22mn tpa ammonia. The effects of the recession could have a long-lasting impact on British petrochemicals with downstream producers severely affected by a reduction in UK-based feedstock. Orders are expected to be erratic as customers remain cautious amid the gloomy economy, which is likely to translate into lower utilisation rates. Well-capitalised companies are the best positioned to withstand this period of unpredictability, while those with high levels of debts could potentially face the threat of bankruptcy or become acquisition targets. While petrochemicals capacities in Asia and the Middle East are climbing with the creation of 1mn tpa plus ethylene crackers, the UK is seeing some of its smaller plants closed down. In 2009, LyondellBasell closed its 185,000tpa LDPE plant at Carrington claiming it was no longer financially viable. This has been offset by Saudi Basic Industries Corporation (Sabic)'s new 400,000tpa LDPE plant in Wilton, but is nevertheless a significant setback for the British polyethylene industry. Dow Chemical also closed a plant in Teesside with capacities of 320,000tpa ethylene oxide (EO) and 275,000tpa ethylene glycol (EG). The loss is expected to have a negative knock-on effect across the sector, prompting Croda to announce the shutdown of its speciality chemicals plants in Teesside in January 2010. As EO/EG is too volatile for safe transport, consumers need to be geographically close to a producer. The country's biggest union, Unite, warned of the consequences of the plant closure, claiming that Artenius and Petroplus would also cut back capacity. Already, Artenius's 500,000tpa PTA plant at Wilton has been idle since March 2009 and Petroplus announced in February that it would sell its Teeside refinery.
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