Long-Term View of Petrochemical Demand Growth

* World demand for ethylene exceeded 100 tonnes in 2004, and is forecast to grow to 177 million tonnes by 2020.

* World propylene demand reached over 64 million tones in 2004, and is forecast to reach 116 million tonnes by 2020.

* Demand growth for propylene is forecast to continue outpacing

* Demand for benzene is forecast to grow at an average annual rate of 2.8% per year through 2020, resulting in nearly 57 million tonnes of demand by 2020.

* Mixed xylene demand is centred in the Northeast Asia region, which currently accounts for 44% of total world demand. Demand growth is forecast to be the strongest in the Middle East, averaging around 10% per year through 2020.

These are some of the conclusions of a recent joint study by Chemical Market Associates, Inc. (CMAI) and Purvin & Gertz, Inc. The study, which presents data to 2020, addresses issues ranging from factors limited the growth of olefins and aromatics demand to shifting feedstock availability.

"The strong growth in petrochemical demand over the 1990-97 time period placed considerable pressure on feedstock supplies and prices. From 1998 through 2004, demand growth stalled in response to various economic and geopolitical events around the world including the Asia Financial Crisis, SARS, rising energy prices, regional conflict in the Middle East and a global economic slowdown," the study reports. "Demand rebounded in 2004 and the world demand for petrochemicals is forecast to grow at an annual rate of about 2.5% over the forecast period."

Based on the forecast for light olefins and aromatics, some of the major conclusions relating to feedstocks that are presented in this analysis include:

* About 55% of the ethylene in the world is produced from naphtha and even though world demand for naphtha, for petrochemical manufacture, will grow at a rate of about 2.5% per year over the forecast period, its market share will slip to 45% due to the growth of ethane-based ethylene facilities in the Middle East.

* The combined growth in olefins and aromatics production will require rapidly increasing naphtha supply. Demand growth will occur in all regions, but Asia/Pacific is the fastest growing area.

* The rapid increase in condensate production in the Middle East will result in increasing supplies for naphtha as well. Some of the condensate will be processed in the Middle East, increasing naphtha exports.The balance will be processed in Asia to produce petrochemical feedstocks.

For more information on this joint study, visit CMAI's Web site at: www.cmaiglobal.com or contact Erika Soechting at: esoecbting@cmaiglobal.com or Glenda Burres of Purvin & Gertz at gmburres@purvingertz.com.