The European petrochemicals market is unlikely to suffer from severe declines in the fourth quarter of 2012 despite the continuing weakness in demand, Tom Crotty, Ineos group director, told Platts during the European Petrochemical Association Conference in Budapest.
In an interview, Crotty, who is also president of the EPCA, said the Q4 market will continue to be difficult as consumer confidence remained "pretty ropey" on the back of the weak macroeconomic environment in Europe.
"But it's not going to be Armageddon. If it was, it would have happened already," Crotty said.
Crotty expects the rest of the year to be "slow and steady," noting that he does not envisage a "hard bump landing" following the unexpected rebound in the third quarter, fueled mainly by stock replenishment after prices plunged in Q2 in line with the fall in the upstream energy prices.
As for 2013, visibility is unclear, he said, but added that "depressed" demand, on continuing economic uncertainty, and feedstock pricing volatility will likely remain key features of the market in the first quarter.
On an industry basis, demand in the food and drinks and pharmaceuticals sectors is expected to remain stable, but construction and the automotive industry meanwhile will continue to be weighed down by the economic downturn.
One of the leading olefins and polyolefins producers in Europe, Ineos has steam crackers in Grangemouth in the UK, Rafnes in Norway and Cologne in Germany with a combined capacity of over 2.5 million mt/year. It also owns a 50% stake in the Naphtachimie joint venture which runs the 740,000 mt/year Lavera cracker in France. The other 50% is held by Total Petrochemicals. The company also produces polyethylene, polypropylene and other derivatives at its European sites.
