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ChemOrbis 2nd PO Event: Turkey in the eye of the hurricane

by ChemOrbis Editorial Team -
  • 28/04/2015 (12:38)
In the last presentation of the 2nd ChemOrbis Polyolefin Event, Andrea Borusso from Borusso Polymers started his talk with a summary of the economic outlook paying particular attention to what polyolefin markets will do if crude oil remains low or if oil prices return to $100/bbl.

“Lower crude income may delay investments in the USA, China and Russia while it may also push Russian and Iranian sellers to pursue aggressive petchem sales,” Borusso said. However, if crude oil goes back up to $100/bbl, investments will resume and margins will recover. A lower crude oil scenario will bring the petrochemical cycle to a peak in 2019-2020 whereas renewed investment on higher crude would send the market into a trough around 2020.

Borusso also analyzed total and net additions of PP and PE capacity by 2015-2025 in a graph showing different regions. He argued that Russia and the CIS region shows the largest net addition of supply less demand by 2025 both for PP and PE assuming all the projects are built as announced.

After talking about the inland routes from Russia to Asia and other destinations, Borusso argued that logistic developments may provide a different supply scenario in Central Asia. He also reiterated his comments from the panel discussion saying that Turkey is affected by the SEA market price albeit indirectly in terms of its relation to China. He also argued that supply fluctuations from Iran and Russia may cause a lower differential between SEA and Turkey.
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