The Asian chlor-alkali and vinyls (CAV) industry has been on a roller coaster ride over the past fve years. The peak demand growth and good margins in 2007 seems like a distant memory now. Since then, the market slumped in 2008, followed by a recovery in 2009 and it now appears to be on a growth path. Nevertheless, the CAV industry in Asia is still faced with a challenging period. Regional producers' margins are being squeezed by higher cash costs, there is an oversupply in the market and competition for export markets is intense. While global demand over the next several years is projected to stay relatively robust, regional plant utilization rates will remain low as a result of capacity expansion, particularly in China. In view of these factors, what can we expect of an industry which is going through an unusual level of challenges? We hope this analysis will provide you with an insight to the magnitude of new capacity in Asia and the location and future of high demand growth sectors. In my previous presentation on the same subject matter two years ago, I mentioned that "the Asia growth train is making a stopover." Well, it appears that the Asian growth train is moving north again, but there is also signifcant headwind in its path.
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