IHS Markit 34th Annual World Petrochemical Conference
Plastic industry in focus as it faces backlash
that threatens chemical makers
IHS Markit held its 34th Annual World Petrochemical
Conference on 19-22 March 2019 in San Antonio, Texas, USA.
The chemical industry is heading for a slowdown as society
turns against disposable plastics and the rise of recycling
weakens demand, IHS Markit predicted at the Conference.
After climbing to multi-year highs, chemical earnings will drop
this year and won't recover until 2023 as environmental issues
add to the drag from a downturn in the global economy,
according to the global research firm.
Speaking in one of the sessions in the conference Jim
Fitterling, chief executive officer of Dow Inc. and chief
operating officer at DowDuPont, said that “Plastic waste I
believe is going to be the sustainability issue of our time. It
represents not only the biggest risk to our industry, but also
one of the biggest opportunities. ”
“Modern society is what it is today because of the miracle of
plastics, we cannot forget that, but we also cannot forget or
ignore that plastic waste is a global crisis that needs oUr
attention,” he further said. The chemical industry is best
positioned to combat plastic waste by developing new
products and innovative ways to recycle, Fitterling said.
Product bans are “a slippery slope” that do more harm than
good, because plastics bring environmental benefits such as
making vehicles lighter and keeping foods fresh longer, he said.
“If we can do chemical recycling back to feedstocks and
back to plastics versus the alternatives — another oil and gas
well — that opens up a whole range of impacts on climate
possibilities that people haven't thought about,” Fitterling
said.
From Left to Right: Lynn Tattum (moderator), Vice President, Oil,
Midstream, Downstream and Chemical, IHS Markit; Jim Fitterling, CEO, plastics waste in marine environments, and worse, 53% of
The Dow Chemical C,o.; Datuk Sazali Hamzah, Managing Director &
CEO, Petronas Chemicals Group Berhad (PCG); and Deepak Parikh,
President and CEO, Clariant Corp. North America
68 ◦ P O P U L A R P L A S T IC S & P A C K A G IN G ◦ APRIL 2019
The issue of plastic waste took center stage at IHS World
Petrochemical Markit's conference as executives of companies
that produce the chemicals that go into plastics called on their
industry to innovate and develop new technologies to promote
recycling and curb pollution.
Although the topic of plastic waste has already been on the
minds of the petrochemical industry, this is the first time the
issue dominated the panels and speeches at the annual
conference, which draws thousands of petrochemical
professionals every year.
The European Union is leading a global movement to phase
out single-use plastics and bolster recycling as society
responds to an ocean pollution crisis that threatens the
industry's “license to operate,” Victor
Bell, president of Environmental
Packaging International, said in a
presentation. At worst, the backlash
against plastic could potentially cut
the growth in demand for new resin
by half, although it probably w on't be
that severe because of limits in
recycling capacity, according to IHS.
Shaped by p h o to g ra p h s of
garbage-strewn beaches and reports
of a vast Pacific garbage patch, public
Bob Patel
CEO of LyondellBasell a ttitu d e s to w a rd p la s tic s are
increasingly skeptical, and it will take
more than education to reverse the
trend, says Bob Patel, CEO of LyondellBasell. Speaking at
Conference, he warned that the problem of plastics waste is
growing, and that it will require innovative solutions
developed cooperatively across the value chain.
“Typically, as an industry we would say let's do more to
explain why plastics are so good for society,” Patel told
attendees. “But I think the time has now come to address
the issue head on, rather than to be advocates for why
plastics are great, because the perception is moving very,
very rapidly.”
To illustrate, Patel noted that the number of Google
searches for “marine litter” has increased by 204% since
2013, while the number of searches for “plastics pollution”
has increased by 608%. He also cited recent polls finding
that 86% of US and UK citizens are concerned about
US citizens and 68% of UK citizens believe it is necessary
to eliminate the use of plastics in modern life.
“Make no mistake, this is a very relevant and prevalent
topic,” Patel said. “O ur children are being taught in schools
that plastics are bad. If we don't do something about this waste
issue, then perhaps those teachers are right—but we will do
something.”
LyondellBasell has, for example, partnered with the
Karlsruhe Institute of Technology in Germany to develop a
chemical recycling process to transform plastic waste into
feedstock. The company has also partnered with SUEZ to start
a recycling company in the Netherlands, Quality Circular
Polymers. “My point is that we're going to have to move on
multiple fronts,” said Patel. “It's not just about mechanical
recycling or just about physical recycling. We're going to have
to do several different things in parallel.”
Executives from LyondellBasell, Dow Chemical, Clariant
Corp. and others touted a new industry wide effort launched
earlier this year called the Alliance to End Plastic Waste. The
nonprofit has about 35 members, but Fitterling said he could
see expanding to 300 members. The Alliance has committed
more than $1 billion over the next five years toward attacking
plastic pollution from a variety of angles — from waste cleanup
to investing in technological advances in recycling.
Some environmentalists have criticized the Alliance as an
ad-hoc measure that w on't address the root of plastic waste.
But Bob Patel defended the Alliance's multipronged approach,
one that involves chemical companies as well as companies that
use plastics to make consumer goods, such as Procter &
Gamble. He encouraged the industry to continue to take a
pragmatic approach to problem.
“I think for us as chemical companies, we can't immediately
get into the mode of defending our turf. If certain single-use
applications should no longer be in plastics, then let it be what
it is,” Patel said. “We have to keep the bigger picture in mind
and not worry about individual applications that may be 1 or 2
percent of the entire market. I think a healthy dose of
pragmatism and thinking about the big picture will be very
important for us.”
Leaders also called on companies to start investing more in
technologies around chemical recycling, which is different
than traditional mechanical recycling that grinds down plastic
bottles into materials for reuse. Chemical recycling involves
processes to turn previously unrecyclable plastics into
feedstocks and fuels to be used again in the production of
clothes, bottles and everyday products.
On the supply side, New plants, primarily in China, will
oversupply chemical markets and depress margins, said Dave
Witte, IHS senior vice president. Earnings are likely to plateau
at a level below last year's, he said. Industry demand growth
will slow to about 4 percent a year, from 4.4 percent, partly
because recycled plastics are replacing virgin resins.
“Polyethylene, used in shopping sacks and packaging, faces
a global oversupply in the near term, while an oversupply of
ethylene, a precursor to polyethylene, will come early next
decade, Witte said. U.S. plastics makers also will face pressure
from natural gas liquids such as ethane, a key raw material, he
said. The outlook is relatively better for polypropylene, used
in bottle caps and carpets.
Variable outlook in emerging markets
The rise in global uncertainty is being keenly felt in
emerging markets, according to an executive panel discussion
at the t World Petrochemical Conference. Economic growth is
decelerating in China, although the government is enacting
stimulus measures to maintain current growth levels. Latin
America is facing both economic and political challenges, and a
supply/demand imbalance could emerge in India. The threat
of trade war between the United States and China hangs over it
all.
In terms of raw GDP growth, China and India—especially
the latter—are expected to see solid figures. According to IHS
Markit, GDP growth is expected to total 6.3% and 6.0% in
China for 2019 and 2020, respectively. In India, GDP growth
is forecast to be 7.1% and 7.0%, respectively. This is despite a
manufacturing recession in China, as IHS Markit's purchasing
managers' index (PMI) for mainland China has slipped below
50 for the first time since 2016.
Emerging markets overall will continue to grow, but at
slower rates. Average GDP growth in emerging markets
totaled 4.8% in 2018, and is expected to decline to 4.6% this
year, according to IHS Markit. Growth in Brazil and Russia is
expected to remain below 2%, although growth in Brazil is
expected to pick up after an exceptionally w eak period.
China still key
China remains a critical market, and a critical source of
growth, for chemical manufacturers. The country is expected
to see ethylene demand exceed 5 million metric tons by 2020,
up from about 3.5 million metric tons in 2015, according to Bi
Chen, executive v.p. with China National Offshore Oil
Corporation (C N O O C; Beijing). Chinese demand can “help
sustain the upcycle” in petrochemicals, Chen says.
Yet, the industry in China is changing. “There is a structural
imbalance in supply and demand of China's petrochemical
products,” Chen says. “Overcapacity of general products and
insufficient capacity of general products exist at the same
time.” For many products, China produces 10% or less of
domestic demand, with particularly large gaps in downstream
polyolefins and engineering plastics. China's government has
urged a public strategy to correct these imbalances, aiming to
push the country's chemical industry downstream into
intermediates and specialties.
Given China's reliance on petrochemical imports, the trade
war with the United States is a threat. The United States is a
major exporter of most petrochemical products, and China is
among the largest importers, Chen notes. “China and the US
have a clear division of labor and rely heavily on each other [in
c h e m i c a l s p r o d u c t i o n ] , ” he s a ys . “ T h e y ar e
c o m p l e m e n t a r y . . . c o o p e r a t i o n me ans mo r e t h a n
competition.”
India rising
While China shifts downstream and considers challenges in
trade policy, India looks set to become a bigger growth engine.
P O P U L A R PLASTICS & P A C K A G IN G o A P R IL 2 0 1 9 o 6 9
 pecial R eport
The country will be the world's most populous by 2025, says
Ajit Kumar, chief general manager/petrochemicals marketing
with Indian Oil Corporation (Mumbai).
This plus rising living standards means big increases in
petrochemicals consumption. By 2040, Indian petrochemicals
consumption is expected to total 104 million metric tons,
compared with 26 million metric tons today, according to
Kumar. About 60 million metric tons of that will need to be
imported, he adds. India's growth is driven by demographics,
including population growth and the rising middle glass,
Kumar says. “Trade issues and the manufacturing recession are
not impacting the Indian economy. ”
Industry's small steps toward sustainability as
a business strategy
Sustainability as part of a company's business strategy is a
highly complex issue, but the chemical industry is beginning to
take tangible early steps toward eventual implementation of a
circular economy. A panel discussion at the World
Petrochemical Conference highlighted several initiatives that
illustrated how the industry is responding to the heightened
global awareness of the issue of plastic waste.
From left to right: Tim Stedman, Senior Vice President/Business
President, Trinseo; Edison Terra, Executive Vice President,
Polyolefins South Anierica/Europe & Renewables, Braskem; Nina
Butler, CEO, MORE Recycling
The industry's various initiatives came none too soon, says
Tim Stedman, senior vice president/business president at
Trinseo. “This one got away from us big time. We are playing
catch-up as an industry, not only in terms of technology but
also in the way of communicating and how to address this issue.
Because it came at us in a way that I don't think we were ready
for,” he says.
Stedman continues: “On the positive side, this industry is
incredibly creative and has immense capability to solve
problems. The reality is that all these announcements by
various brand owners and governments are being made, but
they don't know how to solve them. It's very complicated.” He
adds that a golden opportunity remains to catch up and
“actually demonstrate the real value the industry brings and
that our products can bring. ”
One such example is the chemical recycling of polystyrene
70 o POPULAR PLASTICS & PACKAGING o APRIL 2019
back to styrene, a value chain that Trinseo is predominantly in.
He shared with the audience news that Trinseo's joint venture
(JV) Americas Styrenics has closed the loop with its partner
Agilyx and taken its first commercial truckload of styrene
monomer from recycled polystyrene to route back through its
styrene unit in Louisiana to produce food-grade polystyrene.
“It's small-scale today, a first step that's proof of concept, but
it's commercial quantities that are going through. This is really
exciting, to say that as an industry and as companies we are
taking steps and moving in the right direction.” Agilyx and
AmSty signed a letter of intent to form a JV in November last
year and agreed an offtake deal to process recycled styrene
monomer produced at Agilyx's Tigard, Oregon, facility in
Americas Styrenics' St. James, Louisiana, styrene plant.
A n o th er panelist, E dison T erra, executive vice
president/polyolefins South America/Europe and renewables
at Braskem, highlighted his company's approach. “O ur vision
of sustainability for plastics is circularity. The circular
economy is not about tying different linear chains together, it's
really about redesigning the whole chain to make it circular,
and with the aim of doing that collectively. ”
There are some initiatives that companies can do by
themselves, he adds, giving as an example a project by Braskem
to produce recycled resin “that preserves the mechanical
properties as if it was a virgin product. This is a very disruptive
initiative that we are developing and partnering with a few
customers that we have. ”
The company's Wecycle platform has delivered promising
results to create a recycled resin with higher quality and a high
percentage of recycled materials derived from household post­
consumer thermoformed packaging made from polyethylene.
Its main characteristics include resistance to stress cracking like
that of virgin resins and tensile stress mechanical properties
that are 70% higher than recycled resins currently being used
in the market.
Terra adds: “What we try to use as a strategy is that every
time we tackle one specific solution, we try to make it in a way
that we can scale it very rapidly and replicate it in other places.
We are taking care of the liabilities that we have today but at the
same time we work to not generate new situations. Every time
we are developing a new product or application, we must figure
out and think about the whole life cycle of that product, and
how we are going to introduce it to the economy after the life
cycle is over.”
Nina Butler, CEO of MORE Recycling, points out that
plastics collection in many parts of the world is in decline
because of the poor economics. “In the US we may have
roughly a billion pounds of stranded material that was
collected that doesn't have the demand pull-through, or the
capacity to process it domestically that we had in previous
years because we were able to send that material offshore.”
Despite this, she says she “believes fundamentally that the
petrochemical industry can unlock this plastic paradox, this
challenge of plastic waste versus greenhouse gas emissions.”
Dewey Johnson, vice president/base chemicals and plastics
at IHS Markit, highlighted the improving speed in terms of the
length of time it can take to bring new technology “from the
bench to the market.” Energy renewables are a good example,
he says.
“Only two or three years ago renewables were on the edge
of the conversation. This year renewables are a very significant
part of the energy portfolio as the energy industry looks at
decarbonization of its portfolio. It's a great example of how,
when you have focus and investment, things happen very
quickly,” says Johnson.
Crude-to-chemicals integrated complexes in
the spotlight
The emergence of world-scale crude-oil-to-chemicals
(COTC) and integrated refinery and petrochemical complexes
will have a profoundly disruptive impact upon the chemicals
market, which will only be able to deal with a handful of these
projects.
“We believe that the market can only absorb some of these
projects, so it will have to think about how many of these
complexes it can bear, and it may end up overbuilding
capacity,” says Sanjay Sharma, Vice President/Middle East and
India for Chemical Consulting at IHS Markit.
Speaking in the Feedstocks & Refining Integration track of
the Conference, Sharma adds country strategies are also
driving some of these investments. “There is a risk in that. They
may end up accepting a lower return on their capital because
that is driven by their national strategy. For them, what is
important is placing crude, it's not about maximizing their
returns from chemical investments. They may end up
accepting burning their capital on the chemical business
because for them it's the placement of crude that's more
important. That's their national strategy and that's the concern
for the chemical industry. ”
Sharma went on to outline how chemical companies that
have access to the required technologies and markets “are in a
strong position in this moment because oil companies and
refiners will need those companies to take their products to the
market and have access to their technology. We feel that, for
the chemical players with strong technology and access to the
market, this is an opportunity for them to align with those
refiners and oil companies.”
Some of the largest integrated C O T C
complexes are aiming for yields of anywhere
between 40-80% of chemicals, he says, while their
deep integration will also give them flexibility and
product diversification advantages. “For refiners,
the ability to switch between products is critical as
demand for transportation fuel decreases going
forward. Flexibility is key,” he says.
• Locations such as India, China and SE Asia are
natural preferred destinations for these type of
complexes, he adds, as large multinational
companies and national oil companies look to
operate in growing markets with low capital costs.
He highlighted several examples of the current
crop of mega-facilities being built, including the
Hengli refinery and para-xylene complex, which is
aiming to convert more than 40% of its 400,000 b/d crude
throughput into chemicals. It is due to start operations this year.
“It's a very high level of integration, even at 40%, you're talking
about 8 million tons/year of product coming out of one project,
which is going to have its impact upon the market,” says
Sharma.
Another is the Saudi Aramco/SABIC joint venture,
planning a 400,000 b/d CO TC complex, which Sharma says
aims to convert 40-50% of its throughput into chemicals. It is
planned to start operations in Yanbu, Saudi Arabia by 2025,
producing up to 9 million metric tons/year of chemicals and
base oils. “The previous project, Hengli, is focused more on
aromatics. We think this project, because of the location of this
project, will be more focused on olefins.”
The next level of integration, says Sharma, is represented by
the recent agreement between Aramco, Chevron Lummus
Global and CB&I which is targeting a project with a 70-80%
conversion rate to chemicals. “If they are successful, it will
definitely disrupt the market,” he says. Some of the refineries of
the future will have zero fuels production, according to another
speaker, Honeywell U O P's Keith Couch, senior director/sales
support and integrated product solutions.
“Petrochemicals integration was a dream long ago. It's
becoming the standard upon which all integrated industrial
mega-complexes are being built. We do see a future where some
refineries produce only petrochemicals. The opportunity to do
so has been determined by fundamental economics,” he says.
He adds that he doesn't see a fundamentally balanced future
in terms of olefins and aromatics. “We didn't see a balanced
past, and I think the past is going to be the same as the future.
About 75% of chemicals is olefins-driven, and 25% is
aromatics-driven, that's been the same for about the past 15-20
years. Fundamental economics will continue to show that same
ratio to be true.”
YPF sees Argentina petrochemical production
hub within next decade
Argentina has the potential to create a petrochemical cluster
within the next decade, says Federico Veller, chemicals
executive manager at YPF (Buenos Aires), Argentina's state-
P O P U L A R PLASTICS & P A C K A G IN G O A P R IL 2 0 1 9 Q 71
owned energy company. YPF hopes to develop the Vaca
Muerta formation shale gas and natural gas liquids (NGLs)
potential into significant petrochemical investment to serve
South American markets.
Veller told attendees at the Latin American Petrochemical
Summit part of WPC that YPF was studying world-scale
investment in ethylene, propane dehydrogenation (PDH),
methanol and derivatives, including polyethylene (PE) and
polypropylene (PP). The company is also evaluating expansion
of urea.
“We strongly believe that in the timeframe of the next five to
ten years that a petrochemical cluster could be developed in
Argentina,” Veller says. Partners are being sought, he says.
“The opportunities are so big that it would be impossible to be
developed by only one player,” Veller says. “We need the effort
of several companies.” YPF hopes to help “catalyze this
investment,” he adds.
South America today has a significant petrochemical supply
deficit. In 2018, the region imported 7 million metric tons/year
(MMt/y) of urea, 1.1 MMt/y of PE, 800,000 metric tons/year of
methanol, and 300,000 metric tons/year of PP, Veller says.
New petrochemical production would largely serve regional
demand needs although there is potential for global exports of
methanol, he adds.
YPF is evaluating Argentina's first large-scale liquified
natural gas (LNG) export facility to capitalize on the expected
surge in shale gas production from Vaca Muerta. That
investment is needed to support the upstream, midstream and
infrastructure development needed to ensure petrochemical
feedstock supply.
WPC Study finds PDH/PP advantaged in
shale crescent
The feedstock and delivery advantages available to
petrochemical projects in the shale crescent region of Ohio,
West Virginia, and Pennsylvania extend beyond the ethylene
chain, according to “Estimated Logistics Benefits of the Shale
Crescent USA Region Versus the US Gulf Coast for Natural
Gas and LPG,” a new study released at the Conference.
Commissioned by Shale Crescent USA and conducted by
IHS M arkit, the study evaluates chemical industry
development opportunities in the region based on the
predicted volume and cost of natural gas (methane) and
liquefied petroleum gas (LPG; propane and normal-butane)
production in the Marcellus and Utica shale plays; the logistics-
related cost advantage of feedstock supply; and the cost to
distribute the chemical products to regional customers.
The Gulf Coast has long been the hub of US petrochemical
production, but the shale crescent region—with its abundant
natural gas and natural gas liquids (NGL) supply, access to
water for transportation and processing, and proximity to the
vast m ajo rity of N o rth A m erica's th erm o p lastics
consumers—can make a strong case for becoming a second
hub.
A related study last year found that the shale crescent
offered compelling advantages over the US Gulf Coast for a
7 2 ◦ POPULAR PLASTICS & PACKAGING o APRIL 2 019
world-scale, ethane-based ethylene and polyethylene plant.
The new study finds that the advantages associated with
natural gas and LPG are not as great, but they are significant,
including feedstock costs 15% lower in the case of methane,
6% lower in the case of propane, and 13% lower in the case of
butane; and delivery costs lower by 26% for methanol, 12%
for integrated ammonia/urea, and 11% for integrated
propane dehydrogenation/polypropylene (PDH/PP).
“While both methanol and ammonia/urea production
from natural gas are economically advantaged in the region
due to the low feedstock costs, the most advantaged LPG
derivative is an integrated propylene [via propane
dehydrogenation] to polypropylene project in the shale
crescent region,” says Anthony Palmer, vice president,
chemical consulting at IHS Markit. “Access to ample supplies
of locally produced propane leads to a competitive
manufacturing cost for propylene, and subsequently
polypropylene, which is augmented by the region's close
proximity to over three-quarters of the US polypropylene
end-use market.”
IHS Markit forecasts that the shale crescent region will
supply 45% of US natural gas production by 2040, up from
29% in 2018, and 19% of US NGL production in 2040, up
from 14% in2018.
Peak refined fuels demand drives increased
refinery integration
Spurred by trends in mobility and process technology, oil
refiners are considering whether to shift their growth
investment into the petrochemical sector, but rapid changes
in public attitudes toward the sustainability of plastics
complicate assessments of market
risk , says M ark E ram o , vice
president/global business
development, energy and chemicals
at IHS Markit. Eramo, speaking at
the Conference.
Re f i ne r s have h i s t o r i c a l l y
regarded energy as their primary
bus i n e s s , and p e t r o c h e m i c a l
production as a secondary and even
minor activity. However, demand
for petroleum products is slowing
toward a plateau mainly because of
increased fuel efficiency, while
demand for petrochemicals is forecast to continue growing at
rates above GDP, says Eramo.
Refiners' options for deepening their participation in
petrochemicals range from increased feedstock supply to
direct investment in production, or integration. The
integration of petrochemical and refining has evolved over
the decades, notes Eramo, with petrochemical production
accounting for a greater and greater share of the crude oil
converted at the facility. Before the 1990s, he says, integration
amounted to the simple recovery of aromatics and FCC
olefins, products that accounted for less than 15% of the oil Eramo. "Listen and watch for signposts, [which show] the
converted. During the 1990s and 2000s, refiners forward potential for a fundamental shift in demand growth."
integrated, incorporating steam crackers and commodity
derivative units that consumed 15-25% of each oil barrel. The ExxonMobil outlines Guangdong
2010s have been a period o f "chemical emphasis," with refiners
petrochemical complex derivative plans
increasing the scale of integration, the complexity of
derivatives production, and the share of oil converted to ExxonMobil's proposed complex in Guangdong Province,
25-40%. China, based on a 1.2-million metric tons/year (MMt/y)
The next step in the evolution of refinery integration will be ethylene flexible feed steam cracker, will include more than 2
crude oil-to-chemicals (COTC). "This is a new technology million metric tons of polyolefins, according to company
being developed, that says you can go as deep into the barrel as officials.
80%—which completely turns the equation around from the The complex would produce 1.2 M Mt/y of polyethylene
1980s and 90s," says Eramo. "Now you are building
for chemicals, not fuels."
CO TC is essentially petrochemical production at
the scale of oil refining, with capacities three to four
times greater than today's largest plants, requiring
significantly higher capital investment. "To me, the
most important message here is, if this does happen,
and we do see these assets being built, chemical
producers will have to adjust the build cycle to the
new supply increments," says Eramo.
However, the economic case for a COTC facility
could change if the demand outlook is affected by the
rising outcry over plastics waste. Eramo points to
several media events over the past year that seem to
have contributed to the negative turn in public
opinion, including the BBC's Blue Planet II
documentary, which drew attention to the problem
of marine plastics waste, and a statement by the
Royal Statistical Society that 90.5% of all plastics
waste produced has never been recycled. In November, The (PE) and 860,000 metric tons/year of polypropylene (PP),
Collins Dictionary highlighted the issue by naming "single­ Jennifer Chan, vice president/major growth ventures at
use" its word of the year, noting that its use had quadrupled ExxonMobil Chemical Company, told attendees at the China
since2013. Forum on the final day of the Conference. The plant will use
"The good news is, governments, associations, companies, ExxonMobil's direct crude steam cracking technology and
and people at the grassroots level are responding. They want to generate around $4.4 billion in sales annually, according to the
help, to get engaged," says Eramo. "Now let's get more tactical company. The project will generate annual earnings of $700
and look at products and applications. What is the potential for million/year based on 2017 feedstock and margin economics,
post-consumer recycled content in that application, or the according to a recent investor presentation.
potential for deselection or displacement?" To answer these “The facility w ould su p p o rt C h in a 's n atio n al
questions, IHS Markit has conducted end-use application petrochemical development priorities and closely aligns with
analysis quantifying the potential impact on the polyethylene the development plans from the Guangdong area,” Chan says.
(PE), polypropylene (PP), polyvinyl chloride (PVC), ExxonMobil wants to build the world-scale petrochemical
complex in the Huizhou Dayawan Petrochemical Industrial
polystyrene (PS), and polyethylene terephthalate (PET) resin
Park at Huizhou in Guangdong Province. Start-up is
markets. Among the findings are that PE and PP hold 90% of
currently planned for 2023, subject to approvals.
the related volume risk.
Fernando Vallina, Chairm an, ExxonM obil China
"The plastics waste issue threatens petrochemical demand
Investment Company, said in a video played during Chan's
growth compared to historical trendline assumptions," says
presentation: “This plant is going to be focused on Chinese
Eramo. However, there is both an upside and a downside, he consumption, a plant in China for Chinese consumers.” He
notes. The downside risk is that large amounts of prime resin added that ExxonMobil's direct crude steam cracking
demand is lost to displacement and increased recycle content in technology would “provide cost advantages over naphtha
existing applications. The upside risk is new applications and feedstock, the industry standard in Asia.”
markets for post-consumer recycled plastic and increased China imported 2 million metric tons (MMt) of ethylene
penetration into new markets and application for prime resins. and 13 MMt of PE in 2017, according to IHS Markit data. It is
It is important to distinguish between "signposts" like the scheduled to add 13-14 M Mt/y of ethylene capacity between
plastics waste issue and transient events when forecasting, says 2018-21. ■

POPULAR PLASTICS & P A C K A G IN G o A P R IL 2 0 1 9 ◦ 73

Copyright of Popular Plastics & Packaging is the property of Colour Publications Pvt, Ltd.
and its content may not be copied or emailed to multiple sites or posted to a listserv without
the copyright holder's express written permission. However, users may print, download, or
email articles for individual use.