Scheduled commissioning of UAE petrochemical complex in Abu Dhabi in 2014 may cause price decline for PP, PE in Middle East in 2014, ICIS Chemical Business reports

SURREY, England , January 14, 2014 () – The scheduled commissioning of United Arab Emirates' (UAE) Borouge3 petrochemical complex in Abu Dhabi in 2014 may cause a price decline for polypropylene (PP) and polyethylene (PE) in the Middle East in 2014.

Borouge 3 will boost its olefins and polyolefins capacity from 2 M tonnes/y to around 4.5 M tonnes/y. The facility includes the construction of a 1.5 M tonnes/y ethane cracker; two Borstar PE plants with a combined capacity of 1.08 M tonnes/y; two Borstar PP plants with a combined capacity of 960,000 tonnes/y; and a 350,000 tonnes/y low density PE (LDPE) unit. Linde will build the third cracker of Borouge at the site.

In 2013, several polyolefin plants in Asia were commissioned, contributing to the expanded capacity in the region. ExxonMobil Chemical commissioned two new 650,000 tonne/year PE units and a new 500,000 tonne/year PP plant in Singapore. Wuhan Petrochemical commissioned a linear low density polyethylene (LLDPE) and HDPE plant, each with a 300,000 tonne/y capacity, and a 400,000 tonne/y PP plant in China. Sichuan Petrochemical also commissioned a new 600,000 tonne/y PE plant and a 450,000 tonne/y PP plant.

The possibility of lifting trading sanctions on Iran would provide more polyolefins supply in 2014 and could further lower market prices. The agreement between Iran and major world powers on 24 Nov 2013 over the country's nuclear programme included easing of the sanctions in exchange for Iran agreeing to restrain its uranium enrichment activity.

The upcoming new infrastructure and construction projects in the Middle East are expected to increase the demand for PE and PP in 2014. A graph show spot prices ($/tonne) of film CFR GCC (HDPE) and film CFR GCC (PP flat yarn raffia) from Dec 2012 to Dec 2013.

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