Polymer producers ‘going to war’ says expert

The upcoming US ethylene and polyethylene boom will spark a share war among producers, one consultant says

Reported in the ICIS journal, Robert Baumann, head of Polymer Consulting told an audience at the Flexpo Houston/2015 conference: “Make no mistake about it, we will be going to war”.

ICIS reports that competition will arise due to the planned construction of a number of new ethylene and polyethylene plants over the next four years.

Additionally the journal states that the vast majority of producers building new plans intent to build an adjoining PE plant. The expanding market, which is a result of the shale gas boom in the US, will see 9.3m tonnes of new PE capacity come online in the time frame.

Baumann is quoted as saying: “We will be swimming in polyethylene […] We never had this much ethylene capacity coming online in this short a time period”.

For producers to stay competitive, exports will likely play a key role.

So what does this mean for non-US producers?

ICIS quotes Martha Moore, senior director of policy analysis and economics at the American Chemistry Council, saying:

“We’re going to be taking some market share away from our global competition,” Moore said. “In the short-term, there may be some rough waters to navigate, but in the long term it will be a positive story.”

Other sources indicate the makings of a slowdown in the boom, which in the years to come could help re-balance global market shares.