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Indian petrochemical producers facing a more challenging environment
With shale gas boom in the US, prices of natural gas and ethane fell and barring seasonal short-term surges, have remained low since then. The US market invested in ethane based capacities which are now coming on line, besides which many projects are still under construction, owing to the large cash cost advantage of ethane cracking over naphtha cracking for ethylene production. A number of new projects are also planned/set up in even distant regions such as India and China, relying on ethane shipped from the US. Besides the US, China is on a massive wave of steam cracker investment, driven by the ethylene industry's healthy margins and high import dependency.  
The financials, past cash earnings of most Indian petrochemical players had been strong over a period of time and their leverage has been low. The impact of evolving scenario overall, will result in subdued returns for the Indian petrochemical producers. From a credit point of view, the tolling margins for all types of crackers (naphtha, gas, ethane and multi feed) are expected to remain subdued and below their last ten-year averages over the medium term owing to a supply overhang, demand slowdown and more intense competition. 
The 2020 India Refining & Petrochemical Forum, scheduled from Mar 18-19 in Delhi, will be discussing series of important and pressing issues and challenges facing not only the petrochemical producers but also the Indian refiners in the next decade.
Presenting and participating organizations include the Indian refining and petrochemical key players and leading technology firms such as IOCL, Reliance Industries Ltd, Nayara Energy, HPCL, BPCL, GAIL (India) Limited, ONGC, Honeywell UOP, Technip India, HPCL-Mittal Energy Limited, Shell etc
 

 

 

 
 
 
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