Companies in the US Gulf Coast, Asia, Europe and Middle East plan to add about 68 million metric tons of ethylene capacity over a five-year period, outpacing demand, according to Wood Mackenzie. The projected oversupply "highlights the need for some capacity closures across the various regions as the industry grapples with the extended and pronounced margin pressure the downturn will bring - aggravated by rising crude and liquid feed costs," says Principal Analyst Patrick Kirby.
Oversupply of ethylene could lead to plant closures
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