GCC petrochemical industry to decline on falling oil prices
26 Nov 2014
(MENAFN) Gulf countries’ petrochemical industry is expected to begin facing challenges due to the falling of oil prices, US shale gas and China’s polyethylene, Khaleej Times reported.
These factors together might cause negative effects on the petrochemical industry, especially with the possibility of China’s polyethylene being used to boost its plastic industry as well as becoming relatively low cost alternative to products from the Gulf regions.
“There is no doubt that these main developments could pose a serious challenge to our region’s petrochemical and chemical industry and its competitive edge as a result. Oil prices have reached their lowest levels in more than four years, causing concerns that current and future petrochemical prices could be impacted,” Qatar’s Energy Ministry said.
These fears lead to the Gulf Petrochemicals Association (GPCA) to say that it expects that the annual growth in the petrochemicals sector in the GCC will slow down to 7 percent over the next 10 years, compared to its previous average of 13 per cent, which was registered during the 2003-2013 period, with the decrease in the petrochemical industry being attributed to the growing regional shortage of natural gas.
This decrease in the industry will happen after the Petrochemicals revenues reached an all-time high in 2013 hitting USD89.4 billion, which was registered after it grew by USD6 billion between the 2012 and 2013, resulting in a 7.3 per cent growth.