WPC ’14: Outlook for chemicals: Building the next wave of middle-class growth
By STEPHANY ROMANOW
HOUSTON -- Stephen D. Pryor, president of ExxonMobil Chemical, provided a longer-term viewpoint on the global petrochemical industry at IHS Chemicals 29th World Petrochemical Conference.
From now through 2040, rising prosperity will improve the quality of life for billions of people. Many will join the middle class; they will have the discretionary income to afford amenities such as cars, appliances and air conditioners.
For example, over the next 25 years, China will go from having just seven cars for every 100 people to about 30 cars for every 100 people; that is the same vehicle ownership rate by the US in the 1950s. A big difference between the 1950s and today, however, is that most manufactured goods now are made with plastics and other petrochemicals.
But it is not just cars and consumer products, he said. All the hallmarks of middle-class life, from better medical care to expanded food choices to increased mobility and productivity, are connected in some way to plastics and other chemical products, said Pryor.
New middle class driving demand
ExxonMobil views the global ethylene demand rising by 150% from 2010 to 2040, or about 3%/yr. It is faster than energy demand and GDP.
Nearly two-thirds of that growth will come from developing countries, and half of that growth will be by China.
The main reason is rising prosperity. China's GDP per capita will continue to increase, and by 2040, it will be five times higher than it was in 2010. Chinas population is on the move and leaving the urban areas for the new cities. By 2040, nearly 75% of the Chinas population will reside in cities. China's demand for chemicals will continue to rise at or above GDP to meet the needs of these upwardly mobile consumers. China still is expected to lead the world in GDP growth through 2040.
ExxonMobil recently doubled its production capacity at the Singapore complex. The project is largest in the company's history and included a new steam cracker that produces chemicals directly from crude oil an industry first with a significant cost advantage over the naphtha feedstock used in the region.
The Singapore complex represents about one-quarter of ExxonMobil's global chemical capacity. In addition to supplying China, the Singapore complex will support other developing nations such as India.
Stephen D. Pryor spoke to a packed ballroom Wednesday at the Hilton Americas in downtown Houston. The speech was part of the IHS Chemical World Petrochemical Conference.
(Photo by Ben DuBose of Hydrocarbon Processing.)
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