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Gulf's petrochemical expansion: Will it cap prices in India?
Dec 21: The Gulf region is massively increasing its petrochemical capacity. And Indian manufacturers must watch this development carefully.
8One region why petrochemical prices from the region will be competitive is because feedstock prices are under $ 2/mmbtu, after it was more than doubled in 2016
8This provides a massive advantage and may act as a price cap for Indian petrochem manufacturers. There will be import pressure as well if demand does not keep growing rapidly.
8The other trend is the heavy usage of ethane and liquid petroleum gas (LPG) as feedstock, implying production of olefins such as ethylene and methanol largely dominates capacity; whilst aromatics obtained from oil derivative (naphtha) comprises under one fifth of total output.
8Saudi Aramco, for example, has worked out a $ 100 billion expansion plan over the next 10 years, making it among the world's largest producer of petrochemicals.
8Then again, Iran -- the world’s largest holder of gas reserves -- plans to double petrochemicals capacity (which totaled 60mn tonnes in 2014) by 2021
8This ambitious target depends on attracting foreign direct investment estimated at US$7-10bn/year and new technologies to upgrade infrastructure and build new units after decades of decay caused by international sanctions.
8Many companies are lining up now to invest in Iran
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