Lowering of petrochemical prices in 2012 could see a spate of antidumping proposals initiated against petrochemical producers in the Middle East, said Monday Hamad Al Terkait, President and CEO of Kuwait Equate Petrochemical Company and Vice Chairman of the Gulf Petrochemical Association (GPCA).
"If the prices are high then every one will be happy. But if they go down in 2012, then we could see more antidumping cases," said Al Terkait, who was interviewed in Dubai ahead the sixth annual GPCA meetings to be held at the Atlantis Hotel, Tuesday through Thursday.
Asked whether he sees petrochemical prices falling the next year, Al Terkait said that he sees strong competition between producers in the Middle East and Asia as products from newly started up plants hit the Asian markets.
"Products from new complexes like Saudi Kayan will begin moving into the markets," he said.
Saudi Kayan has begun commercial production of polymers, intermediates and aromatics from several petrochemical plants at its Jubail based complex since October of this year.
Based on Platts data, the relative strengthening in crude prices in the second half of this year has not led to a rise in petrochemical prices.
The price differential between Brent crude and Platts Global Petrochemical Index stood at about $330 on December 11, down from about $580 at the start of the year.
In November, the Platts Global Petrochemical Index averaged at $1,162/mt down $38/mt from the October average of $1,200/mt.
Over the past year, producers in the Middle East have been the target of antidumping penalties from several countries, including India and Turkey.
In 2010, Turkey levied an antidumping duty of 6% on monoethylene glycol imports from Equate and Sabic, and another antidumping fee of 20% on imports from Saudi Arabia. Meanwhile in November of 2010, India imposed a range of antidumping duties on polypropylene producers in the Middle East.
INCREASING DOWNSTREAM CONVERSION
Al Terkait emphasized that downstream conversion of petrochemical products in the region will gain more prominence in the coming years.
"About 80% of petrochemcals produced in the region are exported but just 5% of them are downstream petrochemical products," he pointed out. Besides the fact that downstream petrochemical plants create more jobs per-capita of investments, a difficulty in exporting upstream petrochemical products in future will lead to them being sold to downstream converters within the region, he said.
Equate looks forward to acquire new companies in the coming years, Al Terkait said, but declined to reveal the names of such companies or the timeframe for the acquisitions.
