BMI View: Kuwait is poised for further petrochemicals expansion over the medium term. When it iscompleted in 2020, Olefins III will expand ethylene and propylene capacity by 1.4mn tonnes per annum(tpa) of ethylene and 600,000tpa of propylene, with downstream expansions including 1mn tpa ofpolyethylene (PE) and 400,000-600,000tpa of polypropylene (PP). However, over the short term, it is facedwith diminishing exports to China and India - two of its largest markets - in a period of Asianpetrochemicals expansion and surging US competition.
The slowdown in the Chinese petrochemicals market has exacerbated the problem of oversupply in the AsiaPacific region. Moreover, the Chinese market is moving towards self-sufficiency. This is likely to crowd outKuwaiti exports from the market, requiring producers to seek other markets. The most obvious alternativemarket is India, which ideally suits the configuration of the Olefins III project with its higher proportion ofpropylene derivatives that the Indian industry needs to import.
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