Close to 1.5 million tonnes of European chemical production capacity shut down since 2008 - Drewry
Rationalisation of Europe’s chemicals industry has so adversely affected the region’s production capacity that it has become reliant on imports, providing much needed employment for chemical tankers, according to the latest edition of the Chemical Forecaster, published by Drewry.
Overcapacity in Western Europe has caused oil companies to permanently shut down refining and chemical plants, leading to supply deficits which are increasingly being filled by imports, particularly from the US. Drewry estimates that close to 1.5 million tonnes of European chemical production capacity has been closed since 2008.
“A key implication of chemical plant shutdowns in Europe is the region’s growing reliance on imports for benzene and styrene,” said San Naing, Drewry’s lead chemical shipping analyst. “North America’s benzene and styrene monomer exports to Europe grew 18.6% a year between 2008 and 2013, contributing to a 71% growth in total transatlantic trade volume in 2013”.
Structural changes in refining and petrochemical landscape in Europe are generating imbalances in supply and demand as well as changing chemical trade patterns.
Naing elaborated: "Chemical shipping operators servicing the eastbound transatlantic are benefiting from trade volume growth in benzene and styrene monomer. If capacity rationalisation continues, domestic chemical supply will tighten further, so providing more employment for chemical tankers."
