"The global polyethylene (PE) market will remain tense in 2018 and 2019." The chief executive of Liederbasel said recently.
"Last year around the world, our operation speed was very high - ethylene and polyethylene were almost full load production." If you look at supply and demand changes from 2017 to 2018, supply growth exceeds demand growth by less than 1%. Leander Basil CEO Bob Patel said at the second quarter earnings conference call.
"Considering that we are starting at a very high starting rate, the impact on the market can be neglected from the starting rate of about 100 basis points. In the previous cycle, we have seen the operating rate drop by 10% or more. He added.
In addition, he pointed out that HDPE accounted for about 70% of PE production in Leandbasel, and that demand growth is expected to exceed supply growth by nearly 1.5% in 2018.
He said that in 2019, the overall PE supply and demand growth is expected to be close to the same level, while HDPE demand growth will once again exceed supply growth.
"When this new (US) capacity comes up, who would have thought that we would have a flat price?" Patel said.
He added: "if the start rate falls by 1% by the end of this year, it seems to me that our market will still be very tense, and there will be no new capacity to go online in the next few years. In the peak season of seasonal demand, market supply will be quite tight. "
Article links: China Plastics Machinery Network http://www.86pla.com/news/detail/50998.html