Asia may not bring expected specialty-chem returns, analysts say

05/13/2013 | Reuters

Petrochemical producers operating in Asia, such as Royal Dutch Shell, Formosa and Lotte, may encounter demand problems as they increase their specialty-chemicals capacity, according to analysts. Cheap shale gas feedstock enables U.S. producers to sell ethylene at half the price required by naphtha-based Asian crackers. "The problem is that people have assumed that demand will recover, so they have carried on building plants on expectations new supply will be needed. Instead, demand is flatlining," said Paul Hodges, chairman of International eChem.

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