Ger­man in­dus­trial or­ders surge on au­tos Plas­tic use to drive oil de­mand

Viet Nam News - - WORLD BUSINESS -

BER­LIN — Ger­man in­dus­trial or­ders re­bounded in Au­gust as an auto sec­tor bot­tle­neck cleared and deals with cus­tomers out­side Europe picked up sharply, and the econ­omy min­istry said man­u­fac­tur­ing should power ahead in the fourth quar­ter.

Con­tracts for Ger­man goods rose by 2.0 per cent after a fall of 0.9 per cent in the pre­vi­ous month, the min­istry said yesterday. A Reuters poll of an­a­lysts had pre­dicted a rise of 0.5 per cent in Au­gust.

“The strong in­crease in or­ders from non-Euro­pean coun­tries proves that Ger­man in­dus­trial prod­ucts re­main in de­mand world­wide, re­gard­less of trade con­flicts,” the min­istry said in a state­ment.

It said the rise was helped by a clear­ing bot­tle­neck in the auto sec­tor that had stemmed from the in­tro­duc­tion of a new pol­lu­tion stan­dard – the World­wide Har­monised Light Ve­hi­cle Test Pro­ce­dure (WLTP) – for which some Ger­man car mod­els needed to gain reg­u­la­tory clear­ance.

With that hur­dle over­come, “the pos­i­tive eco­nomic trend in the in­dus­trial sec­tor should re­sume in the fourth quar­ter,” the min­istry said.

Yesterday’s stronger-than-ex­pected data fol­lowed a solid busi­ness con­fi­dence read­ing from Europe’s largest econ­omy last week.

The Ifo eco­nomic in­sti­tute’s sur­vey showed busi­ness morale held steady in Ger­many in Septem­ber, propped up by con­sumer spend­ing and con­struc­tion, point­ing to fur­ther growth even if a un­cer­tain global eco­nomic out­look wors­ened.

“We don’t need to worry about the Ger­man econ­omy, even if in 2018 it looks like there will be a slower rate of growth than orig­i­nally ex­pected,” said Thomas Gitzel, econ­o­mist at VP bank.

The gov­ern­ment has fore­cast 2.3 per cent growth this year and 2.1 per cent for 2019. — REUTERS LON­DON — Plas­tics and other petro­chem­i­cal prod­ucts will drive global oil de­mand to 2050, off­set­ting slower con­sump­tion of mo­tor fuel, the In­ter­na­tional En­ergy Agency (IEA) said yesterday.

De­spite gov­ern­ment ef­forts to cut pol­lu­tion and car­bon emis­sions from oil and gas, the Paris­based agency said it ex­pected the rapid growth of emerg­ing economies, such as In­dia and China, to pro­pel de­mand for petro­chem­i­cal prod­ucts.

Petro­chem­i­cals that are de­rived from oil and gas feed­stocks form the build­ing blocks for prod­ucts that range from plas­tic bot­tles and beauty prod­ucts to fer­tilis­ers and ex­plo­sives.

Oil de­mand for trans­port is ex­pected to slow by 2050 due to the rise of elec­tric ve­hi­cles and more ef­fi­cient com­bus­tion en­gines, but that would be off­set by ris­ing de­mand for petro­chem­i­cals, the IEA said in a re­port.

“The petro­chem­i­cal sec­tor is one of the blind spots of the global en­ergy de­bate and there is no ques­tion that it will be the key driver of oil de­mand growth for many years to come,” IEA Ex­ec­u­tive Di­rec­tor Fatih Birol told Reuters.

Petro­chem­i­cals are ex­pected to ac­count for more than a third of global oil de­mand growth by 2030 and nearly half of de­mand growth by 2050, ac­cord­ing to the world’s

Con­tracts for Ger­man goods rose by 2.0 per cent after a fall of 0.9 per cent in the pre­vi­ous month, the min­istry said on Fri­day. A Reuters poll of an­a­lysts had pre­dicted a rise of 0.5 per cent in Au­gust.

en­ergy watch­dog.

Global de­mand for petro­chem­i­cal feed­stock ac­counted for 12 mil­lion bar­rels per day (bpd), or roughly 12 per cent of to­tal de­mand for oil in 2017. The figure is fore­cast to grow to al­most 18 mil­lion bpd in 2050.

Most de­mand growth will take place in the Mid­dle East and China where big petro­chem­i­cal plants are be­ing built.

Oil com­pa­nies such as Exxon Mo­bil and Royal Dutch Shell plan to in­vest in new petro­chem­i­cal plants in the com­ing decades, bet­ting on the ris­ing de­mand for plas­tics.

Plas­tics use has come un­der in­creased scru­tiny as waste makes its way into the oceans where it harms marine life, prompt­ing sev­eral coun­tries to ban, partly ban or tax sin­gle use plas­tic bags.

But the IEA re­port said gov­ern­ment ef­forts to en­cour­age re­cy­cling in or­der to curb car­bon emis­sions would have only a mi­nor im­pact on petro­chem­i­cal growth.

“Although sub­stan­tial in­creases in re­cy­cling and ef­forts to curb sin­gle-use plas­tics take place, es­pe­cially led by Europe, Ja­pan and Korea, these ef­forts will be far out­weighed by the sharp in­crease in de­vel­op­ing economies of plas­tic con­sump­tion,” it said.

Un­der the IEA’s most ag­gres­sive sce­nario, re­cy­cling could hit around 5 per cent of high-value chem­i­cal de­mand.

Petro­chem­i­cal plants mainly run on light oil prod­ucts such as naph­tha and liq­ue­fied petroleum gas (LPG).

But nat­u­ral gas is be­com­ing an in­creas­ingly favoured feed­stock, par­tic­u­larly in the United States where shale gas pro­duc­tion has risen. — REUTERS

Plas­tics and other petro­chem­i­cal prod­ucts will drive global oil de­mand to 2050. — Photo un­en­vi­ron­ment.org

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