Despite opposition from environmentalists, somewhat stagnated growth, and cancellation of a major petrochemical project, Taiwan’s petrochemical industry is currently experiencing rapidly increasing profits. Infiniti Research expects this trend to continue and the outlook for this industry to be positive over the near future, and predicts that Taiwan will remain one of the world’s largest producers of petrochemicals.
Taiwan’s petrochemical industry primarily produces commodity chemicals, especially polypropylene and other plastic resins. Despite constraints on the supply of raw materials and an increased reliance on imports for certain chemicals and materials, profits and profit margins in the industry are increasing substantially. This is largely due to oversupply in the global crude oil markets, which is resulting in lower prices of crude oil (in the range of US$50 - 55/bbl). As crude oil comprises almost 80% of costs for upstream petrochemical manufacturers, operating costs are falling in line with crude oil prices.
These increased profits are helping Taiwan’s petrochemical manufacturers to thrive despite the presence of many obstacles, including the cancellation of the Kuokuang petrochemical complex project in 2011, which eliminated the potential for many jobs and the opportunity for increased production throughout the industry. Additionally, new environmental regulations and protections were expected to have a negative effect on the production and revenues of petrochemical manufacturers in Taiwan. While total revenues in the industry have dropped slightly as of late, crude oil oversupply is so far allowing the industry to increase profits and remain afloat.
The changing circumstances and potential sensitivity of this industry can make it difficult for vendors and competitors to gain a full and accurate picture of how it will perform over the long term. Market intelligence is essential to understand opportunities, challenges, and trends in Taiwan’s petrochemical industry and how its performance will affect the global petrochemical industry as a whole. It can provide insights on factors that are essential for understanding the market potential, including government regulations, environmental standards, and fluctuating raw material prices.
Infiniti Research was recently approached by a leading chemicals manufacturer who wanted to identify and profile key prospects for its products in the European market. The insights and solutions provided by Infiniti’s chemical industry analysts allowed the client to streamline its sales efforts, identify key competitors, and gain a holistic understanding of purchase drivers, criteria, and challenges.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/10052017/infiniti-research-low-crude-price-helps-taiwan/