Higher global ethylene supply to pressure margin forecasts, says Wan Zulkiflee

KUALA LUMPUR: The global ethylene capacity is expected to grow to seven million tonnes per annum and will put pressure on margin forecasts, said Petroliam Nasional Bhd (Petronas) president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin.

The national oil company anticipates the price to decline from US$550 (RM2,250) per tonne next year to around US$350 per tonne in 2025.

“The industry is aggressively pursuing growth in specialty chemicals to benefit from higher product spread as opposed to commodity chemicals. It also needs to brace for the impact of the United States-China trade war,” he said in his speech at the Asia Petrochemical Industry Conference 2018 yesterday.

Wan Zulkiflee said the US shale-backed petrochemical expansion and integrated petrochemical projects from India, China and Middle East would push olefins and derivative supply to the region.

“As we face these market dynamics, we must also contemplate the industry’s preparation for the future. This is where associations such as the Malaysian Petrochemicals Association and other regional associations play an important role in fostering a collaborative spirit and initiate strategic dialogues in a wellorchestrated and cost-effective manner,” he added.

Deputy International Trade and Industry Minister Dr Ong Kian Ming said the government would ensure that the country remained open to international trade and investment.

“We want to position Malaysia as an Asean hub for exporting value -added goods, namely petrochemical-based or otherwise, to China and the US.

“We will work to ensure that our manufacturers and investors can continue to leverage the highgrowth rate in Asia, which is driven by rapid urbanisation and income growth,” he said.