Recently in Petrochemicals Category

With the growth of the Chinese middle class and its buying power, the world is now looking to China to help to lift the global economy out of recession. But the petrochemical market in the country is not showing any signs of that occurring.

If there's one thing that sellers don't favor in a free market, it's the principle that what goes up must come down.

And polypropylene market participants in Europe have every reason to fret.  Prices are currently the highest in the world, and are fast approaching the historic peaks seen in the second quarter of 2011.

As many in the petrochemical industry will tell you, the much-touted shale gas revolution has been a blessing for some and a curse for others.

Count US propylene as part of the latter, some in that market say. That said, if the industry plays its cards right, it doesn't have to be.

Let's just play make-believe, OK?

Just for a second, pretend about half of the states did not actually ban methyl tertiary butyl ether, aka MTBE. Imagine the nation's half million-plus underground storage tanks (USTs) are all perfectly enclosed and sealed; not a molecule can escape. What if refiners did not dismantle a majority of MTBE plants and US refiners still had those production units?

Is there any possible way that MTBE can find its way back into the US gasoline pool?

For anyone observing from the outside, Saudi Arabia's petrochemical manufacturers would seem little more than a vast, cash generating machine. Given that it has the world's largest hydrocarbon reserves and a huge line-up of investments (estimates hover in a wide range of $20 billion to $100 billion over the next five years) from both prosperous government and foreign investors, it's an image that's hard to argue against.

However, the financial results for the fourth quarter of 2011 of many of these Saudi companies reveal a very different picture indeed. While petrochemical giant like Sabic showed a drop in net income Q4 2011, others, like Saudi Kayan and Petrochem, in fact showed net losses.

Saudi Arabia's petrochemical industries index dropped 1.65%, or 103.12 basis points year-on-year on December 31, 2011 to 6232.93.