The 00s of the new century is coming to an end. At this special moment, the United States’ Chemical Week pointed out that the rapid progress of globalization, the consolidation and dismantling of business, and increasingly stringent management regulations have been pointed out during the inventory of major events in the global industry over the past 10 years. This, together with the global financial crisis, has become a decisive force in reshaping the global industry.
China, the Middle East has a strong rise China's rise to become the world's major chemical production country can be regarded as an important event in the global industry in the first 10 years of the new millennium. The American Chemical Industry Council (ACC) estimates that in the past 10 years, China’s chemical output value has increased by nearly 7 times. It is expected that in 2009 China's chemical output value will reach 600 billion US dollars. China is likely to replace the United States in 2011 to become the world's largest chemical market. In 1998, the output value of China's chemical products was equal to that of France, which was approximately US$90 billion; in 2002 it exceeded Germany; in 2005, it exceeded Japan; in 2009, it was close to twice the value of Japanese chemicals.
Some chemical companies in China have also grown rapidly. Sinopec ranked eighth in the 2009 Chemical Week magazine's $1 billion club, and the company failed to enter the $1 billion club 10 years ago and entered the company for the first time in 2001. China's GDP more than doubled from 2000 to 2009, from 1.2 trillion US dollars in 2000 to 4.3 trillion US dollars in 2009.
In the past 10 years, the Middle East has continued to be a beautiful landscape of the global petrochemical industry, consolidating its position as a global production center for basic petrochemical products. The Middle East has replaced North America (including Mexico) as the world's largest ethylene glycol production area, accounting for about one-third of global production capacity. The CEO of Maack Business Services in Zurich stated that by 2015, polyethylene (PE) and polypropylene (PP) capacity in the Middle East will more than double, reaching 22.6 million tons/year and 9.9 million tons/year respectively. The share of global PE production capacity in the Middle East will jump from 13% in 2008 to 19% in 2015, which will become the world's largest PE production region; at the same time, the proportion of PP production capacity will also be from 2008. 9% jumped to 13% in 2015, becoming the world's fourth largest PP production area after Asia-Pacific (excluding China), China and Western Europe.
Increasingly strict management regulations After the United States experienced the terrorist attacks on September 11, 2001, security issues became the main topic of global industry, and the United States took the brunt of it. ACC has requested chemical companies to increase the content of safety measures in the Responsible Care Report since 2002. In the following years, ACC has spent a lot of time repeatedly requesting Congress to pass safety regulations for chemical plants.
The U.S. Congress eventually passed the Chemical Plant Safety Act in 2006. The implementation of new safety regulations has forced more chemical companies to conduct safety assessments and enhance safety measures. The US Department of Homeland Security and other stakeholders involved in the formulation of regulations are also working hard to improve the new regulations and improve their operability and cost effectiveness.
"Chemical Weekly" describes: "The final impact of the September 11 terrorist attacks on the US chemical industry is still inconclusive, but some changes are very clear. That is, after 9/11, you can no longer see the chemical without access control in the United States. A factory, a rail car full of chlorine, rumbling through a densely populated area, or an unidentifiable person walking near a chemical plant.â€
In addition, the introduction of the European Union's Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) is also considered to be one of the major events of the EU and even the global industry in the past decade. This regulation has increased the supervision and financial burden on chemical companies. Some chemical companies may not be able to afford high test costs or will stop production of some low-yield chemicals.
The financial crisis affects demand In the second half of 2008, producers began to worry about inflationary pressures and the impact of soaring energy and raw material prices. International oil prices rose sharply from approximately US$90/barrel at the beginning of 2008 to US$147/barrel at the end of July. The sharp increase in raw material prices triggered a sharp rise in the prices of chemical products, with an average increase of more than 40%. By August, these concerns were replaced by the uncertainty of the US credit market. By the end of the third quarter of 2008, the global financial crisis finally broke out, which led to the collapse of demand for industrial products.
ACC chief economist Kevin Swift said: "The global chemical market demand has bottomed out in March 2009 and is currently recovering. However, as of now, the recovery is mainly due to the destocking movement of products. At the end of the day, we do not see a real recovery in the end market demand. Consumers are still very cautious.†ACC predicts that the global GDP will show a negative growth of 2.4% in 2009, which is the first negative growth since World War II. However, the consensus of all parties in the current market is that the recession is over.
The price of M&A transaction was new high. In addition, the price of M&A transactions reached a new height. In the ten weeks since the end of May 2007, Global Industry has announced four mergers and acquisitions transactions with transaction prices exceeding US$10 billion. SABIC, Apollo Management of the United States, Access Industry of the United States, and Akzo Nobel of the Netherlands announced the purchase of GE Plastics, Huntsman, Lyondell Basel, and ICI for more than US$10 billion, respectively. Just before this, global industry only Dow Chemical announced in 1999 that the acquisition of United Carbon Corporation for more than 10 billion US dollars. On April 1 this year, Dow Chemical once again completed an M&A transaction with a transaction price of more than US$10 billion and acquired Rohm and Haas for US$16.3 billion.
China, the Middle East has a strong rise China's rise to become the world's major chemical production country can be regarded as an important event in the global industry in the first 10 years of the new millennium. The American Chemical Industry Council (ACC) estimates that in the past 10 years, China’s chemical output value has increased by nearly 7 times. It is expected that in 2009 China's chemical output value will reach 600 billion US dollars. China is likely to replace the United States in 2011 to become the world's largest chemical market. In 1998, the output value of China's chemical products was equal to that of France, which was approximately US$90 billion; in 2002 it exceeded Germany; in 2005, it exceeded Japan; in 2009, it was close to twice the value of Japanese chemicals.
Some chemical companies in China have also grown rapidly. Sinopec ranked eighth in the 2009 Chemical Week magazine's $1 billion club, and the company failed to enter the $1 billion club 10 years ago and entered the company for the first time in 2001. China's GDP more than doubled from 2000 to 2009, from 1.2 trillion US dollars in 2000 to 4.3 trillion US dollars in 2009.
In the past 10 years, the Middle East has continued to be a beautiful landscape of the global petrochemical industry, consolidating its position as a global production center for basic petrochemical products. The Middle East has replaced North America (including Mexico) as the world's largest ethylene glycol production area, accounting for about one-third of global production capacity. The CEO of Maack Business Services in Zurich stated that by 2015, polyethylene (PE) and polypropylene (PP) capacity in the Middle East will more than double, reaching 22.6 million tons/year and 9.9 million tons/year respectively. The share of global PE production capacity in the Middle East will jump from 13% in 2008 to 19% in 2015, which will become the world's largest PE production region; at the same time, the proportion of PP production capacity will also be from 2008. 9% jumped to 13% in 2015, becoming the world's fourth largest PP production area after Asia-Pacific (excluding China), China and Western Europe.
Increasingly strict management regulations After the United States experienced the terrorist attacks on September 11, 2001, security issues became the main topic of global industry, and the United States took the brunt of it. ACC has requested chemical companies to increase the content of safety measures in the Responsible Care Report since 2002. In the following years, ACC has spent a lot of time repeatedly requesting Congress to pass safety regulations for chemical plants.
The U.S. Congress eventually passed the Chemical Plant Safety Act in 2006. The implementation of new safety regulations has forced more chemical companies to conduct safety assessments and enhance safety measures. The US Department of Homeland Security and other stakeholders involved in the formulation of regulations are also working hard to improve the new regulations and improve their operability and cost effectiveness.
"Chemical Weekly" describes: "The final impact of the September 11 terrorist attacks on the US chemical industry is still inconclusive, but some changes are very clear. That is, after 9/11, you can no longer see the chemical without access control in the United States. A factory, a rail car full of chlorine, rumbling through a densely populated area, or an unidentifiable person walking near a chemical plant.â€
In addition, the introduction of the European Union's Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) is also considered to be one of the major events of the EU and even the global industry in the past decade. This regulation has increased the supervision and financial burden on chemical companies. Some chemical companies may not be able to afford high test costs or will stop production of some low-yield chemicals.
The financial crisis affects demand In the second half of 2008, producers began to worry about inflationary pressures and the impact of soaring energy and raw material prices. International oil prices rose sharply from approximately US$90/barrel at the beginning of 2008 to US$147/barrel at the end of July. The sharp increase in raw material prices triggered a sharp rise in the prices of chemical products, with an average increase of more than 40%. By August, these concerns were replaced by the uncertainty of the US credit market. By the end of the third quarter of 2008, the global financial crisis finally broke out, which led to the collapse of demand for industrial products.
ACC chief economist Kevin Swift said: "The global chemical market demand has bottomed out in March 2009 and is currently recovering. However, as of now, the recovery is mainly due to the destocking movement of products. At the end of the day, we do not see a real recovery in the end market demand. Consumers are still very cautious.†ACC predicts that the global GDP will show a negative growth of 2.4% in 2009, which is the first negative growth since World War II. However, the consensus of all parties in the current market is that the recession is over.
The price of M&A transaction was new high. In addition, the price of M&A transactions reached a new height. In the ten weeks since the end of May 2007, Global Industry has announced four mergers and acquisitions transactions with transaction prices exceeding US$10 billion. SABIC, Apollo Management of the United States, Access Industry of the United States, and Akzo Nobel of the Netherlands announced the purchase of GE Plastics, Huntsman, Lyondell Basel, and ICI for more than US$10 billion, respectively. Just before this, global industry only Dow Chemical announced in 1999 that the acquisition of United Carbon Corporation for more than 10 billion US dollars. On April 1 this year, Dow Chemical once again completed an M&A transaction with a transaction price of more than US$10 billion and acquired Rohm and Haas for US$16.3 billion.
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