SEOUL, South Korea--(BUSINESS WIRE)--A team of experts from business information provider IHS (NYSE: IHS) will present a global and regional view of the implications of the oil price decline on the Asian and global chemical industry, at a special IHS Chemical marketing seminar to be held on Thursday, May 7, 2015, during the Asian Petrochemical Industry Conference at the COEX Convention Center in Seoul.
Leading the seminar will be Dave Witte, senior vice president-IHS and general manager-IHS Chemical. Witte will be joined by Tony Potter, vice president-chemical insight for IHS Chemical Asia Pacific; Paul Pang, vice president-chemical insight, IHS Chemical China; Kurt Barrow, vice president-oil markets and downstream at IHS Energy; Brian Jackson, senior economist-IHS Economics and Country Risk; and Gao Tao, manager-light vehicle production forecast, IHS Automotive China.
The IHS APIC Chemical Marketing Seminar agenda, on Thursday, May 7, 2015, takes place at Room 104-105, Grand Ballroom, COEX Convention Centre in Seoul:
9:00 a.m. Global Economic Outlook, Brian Jackson, senior economist-IHS Global Insight, Economics & Country Risk
Recent trends in the global economy can best be described as multiple divergences. These include diverging growth, diverging impacts from lower commodity prices, diverging monetary policy actions, and diverging trade performance. These divergences will shape the speed and composition of global growth during the coming years. In addition to the global outlook, emphasis will be placed on China’s economic slowdown, stimulus and reform.
9:30 a.m. Energy: A Turning Point – the Industry Resets: Kurt Barrow, vice president-Oil Markets & Downstream, IHS Energy
The rapid decline of global oil prices—followed by OPEC’s decision to maintain its production, shifts the global pendulum of oil supply and demand to the American crude oil market—creating a complicated scenario for chemical producers dependent on crude-based feedstocks. North American tight oil will become the (inadvertent) swing supplier, but despite a sharp decline in drill rigs, U.S. production continues to rise. The price of oil will determine when production growth will slow and when demand growth will rise to help solve the imbalance.
9:55 a.m. State of the Industry, Dave Witte, senior vice president-IHS and general manager-IHS Chemical
Industry continues to be buffeted by unpredictability and volatility in regulatory, economic and energy dynamics. Rapid oil price declines in the face of weak demand and rapidly rising shale supply have driven a dramatic reversal in oil and chemical pricing. Meanwhile, chemical demand has remained tepid and the drop in oil prices has not encouraged consumers to keep or build inventory. The resultant lowering and flattening of the supply curve, combined with the relative strengthening of the U.S. dollar, has changed the competitive landscape and redistributed profits, both geographically and throughout the value chain. While the near-term outlook for chemical demand remains subdued, cheaper oil is sowing the seeds of higher demand and higher utilizations. The outlook and impact clearly varies by region and value chain, with some specialty sectors now benefitting from the lower pricing likely to see a reversal, and others simply so oversupplied that additional demand will not matter. This presentation will examine the outlook for the industry and quantify the potential impact on industry profits and margins as the industry transitions from high oil prices to low oil prices and back again.
10:40 a.m. Asia Petrochemical Industry Outlook, Tony Potter, vice president-Chemical Insight, IHS Chemical Asia Pacific
Asia is the epicenter of chemical demand growth and this presentation will examine the demand drivers as well as the headwinds to continued growth. Investments in North America and the Middle East based on low-cost feedstocks dominate the headlines, but Asia will build more new capacity than these regions combined. Lower oil prices have made naphtha-based complexes in Asia more competitive relative to gas- or coal-based complexes. This discussion will assess the competitive position of Asia and the evolution of petrochemical and polymer trade. Potter will offer an overview of investments in the main value chains and provide perspective on the next capital cycle in Asia. He will also discuss the prospects for investments outside of China and India.
11:00 a.m. China Chemical Industry Update – Latest Developments and the Impact of Low Oil, Paul Pang, vice president-Chemical Insight, IHS Chemical China
China is highly diversified in demography, economic development and chemical demand, with the majority of the country’s chemical demand concentrated in the east and south. Much of the country’s chemical industry was developed in the past 20 years, with the biggest changes being the emergence of unconventional chemicals, including coal chemicals and propane dehydrogenation. Prior to coal chemicals, most of China’s petrochemical production facilities were located in the coastal regions, near demand centers. In contrast, nearly all coal chemical projects are located in the north and west regions, where abundant, stranded coal resources exist. Following a wave of coal chemical project developments, a new production base is moving westward. The recent oil price decline is generally good news for the Chinese chemical industry. The majority of petrochemical producers and all consumers benefit from the low oil price, and margins for integrated refining and petrochemical producers have improved even though chemical product prices fell. Low oil prices, however, are bad news for the newly emerged unconventional chemical producers.
11:20 a.m. Automotive Industry Developments, Gao Tao, manager-Light Vehicle Production Forecast, IHS Automotive China
The massive, 20-year rise in international trade and globalization is slowing, and the world’s economy is once again looking to America, not Brazil, Russia, India or China, to provide the engine for economic growth. China is still the world’s largest automobile market, but its economy is slowing markedly. In addition, the United States’ recent investments in new crude oil extraction technologies, and OPEC’s decision not to reduce production, has had a massive impact on oil markets and the commodity’s key players. The resulting increases in oil supply—the life-blood of the global economy—is transforming the world’s geopolitics. Resulting lower fuel costs will have significant implications for auto consumers and the products they buy for years to come, and chemical producers must prepare their strategies now to meet market growth demands from the emerging auto market.
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