The petrochemical industry uses petroleum and natural gas based feedstocks such as naphtha, LPG, gas oil to produce plastics, rubber and fiber raw materials and other intermediates which are consumed by several sectors such as packaging, electronics, automotive, construction, textile and agriculture.
The petrochemical industry has started to develop in the second half of the 20th century and has become one of the foundation stones of the modern economy in the last fifty years due to its extremely wide product range and application field. Thousand of petrochemical products utilized by consumers, became an indispensable part of human life and the developments in the petrochemical industry raised the living standard significantly.
The current market value of the petrochemical industry is about billion dollars. The petrochemical industry experiences cycles in prices and profitability parallel to the developments in the world economy and in conjunction with the movements in supply and demand.
In these cycles, high profitable periods of years followed by low profitable or unprofitable periods of years. In the world petrochemical sector, the low profitable period starting with the Asian crisis at the end of has been continuing. A new profitable period, which will start with a fundamental recovery in and will peak in , is expected in the sector. In recent years, structural changes are being carried out in the petrochemical industry. The companies try to increase their competitive positions and profit margins by means of narrowing, broadening or changing their fields of activities either individually or by merging with other companies.
Petrochemical industry is open to global competition and raw material, market and technological advantages play significant roles in this competition. These are the ones to follow. One sound signal is insider buying. Riot Blockchain Inc. Investors Business Daily also added the stock to its watchlist. Riot Blockchain closed up 8. Riot Blockchain Daily Chart Analysis The stock has been pushing higher and now has reached resistance in what technical traders call an ascending triangle pattern.
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Similarly, most ethane and butanes are produced from gas extraction operations which are also captured in NAICS Following a decline in output caused by the recession, the industry showed strong growth in The majority of larger firms operating in Canada are owned by U. Compared to the overall manufacturing average, Figure 2 shows that the petrochemical industry has a very high level output per employee, reflecting the capital intensiveness of this industry.
The industry employs a highly skilled workforce as evidenced by the high average salary levels compared to all manufacturing in Figure 3. Canada's petrochemical plants are concentrated in Alberta, Ontario and Quebec as shown in Figure 4. Trends in trade orientation are shown in Figure 5. Canadian exports represented 39 percent of shipments in , and imports accounted for 19 percent of the domestic market. The proportion of Canadian exports going to the United States increased from 64 percent in to percent in The proportion of our imports coming from the United States was 95 percent in The strong predominance of our trade with the United States reflects the tariff advantage resulting from the North American Free Trade Agreement, and the impact that transportation has on competitiveness in a given market.
There are no tariffs on petrochemicals imported into Canada for example, Canada's Most Favoured Nation tariff rate is 0 percent. Export tariffs from Canada into other countries are highly variable. For countries like Canada that have signed on to the Chemicals Tariff Harmonization Agreement CTHA , all petrochemical tariffs will drop to 0 percent once the Agreement is fully implemented.
Raw material and utilities constitute almost two thirds of petrochemical manufacturing costs. Low feedstock prices are, therefore, critical to the success of Canadian operations.
Not only are oil and gas used as fuels, but they are also the source for most of the feedstocks used to produce petrochemicals.
Whereas oil has long been a globally-traded commodity and prices tend to be more or less equal in all regions, natural gas is a regional commodity, with wide variations in prices observed from one part of the world to another. Gas has only been transported from source to markets in situations where construction of a pipeline was economic. Liquified natural gas LNG opens up another option for moving gas from so-called stranded pools to markets, and thus moves natural gas closer to becoming a global commodity.
At present less than 10 percent of global natural gas is moved as LNG and this ratio will need to become much higher before we start to see significant equalization of prices on a global scale.
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