Petrochemicals - Part I & II
Brussels Schedule
9th - 10th September 2008, Brussels
Petrochemicals: Part I – A Beginner’s Course
An introduction to the industry
This beginner’s course starts with the assumption that the delegates have no knowledge of petrochemicals. During the day, their knowledge is built up so at the end they have an understanding of the key fundamentals that drive the petrochemical business.
The first session explains that essentially six building block chemicals are used to make petrochemicals and the everyday items that we use in our lives. We discuss the raw materials required and processes used as well as some of the commonly used terms.
We then look at the development of the oil industry and its relationship with petrochemicals. Oil refinery processes are discussed and the role petrochemicals play in the refinery. Information on crude oil and natural gas reserves, production and consumption is included.
The global petrochemical business is examined looking at chemical production and growth, and who are the main players. In this, we look at the growing influence of China and the increasing role the Middle East with its huge competitive advantage will play in the business.
A session introduces pricing and markets covering factors that influence price and how prices are set in the market. Types of pricing and price jargon are explained.
A break-out session gives delegates the opportunity to put some of the learning into practice. Working in groups with help from the presenters, you are given a task to develop a project in a selected part of the world. Presentations allow for group discussion on issues and topics not covered earlier.
The day concludes with an overview of the course and the strategies of the big chemical companies. A glimpse at future trends is given.
Petrochemicals: Part II – The Next Level
A deeper understanding of market dynamics, costs, pricing and profitability
This course follows on from the beginner’s programme taking a deeper look into the main petrochemical markets and understanding what constitutes the cost of making petrochemicals, the influence on prices as well as profitability and margins. Delegates will be given a task to calculate the cost of producing a petrochemical.
The first session explores the markets for the three main olefins – ethylene, propylene and butadiene – and their main derivatives. We will discuss market growth factors, production growth by region and trade for the main products.
A polymers session covers polyethylene, polypropylene, polystyrene and polyvinyl chloride. We look at the processes to make these polymers, the markets with an outlook, and consumption data.
Our attention next turns to the main aromatics – benzene, toluene, orthoxylene and paraxylene. We look at the processes to make aromatics and how to balance aromatics production with demand. A look at the market includes the main derivatives, consumption and trade.
We then get down to explaining the cost of production. The components of fixed and variable costs are described and how to build up the costs to a final figure. Cost curves and leader and laggard concepts are explained, and how theoretical prices are set.
The class room exercise enables delegates to practice some cost calculations with an end task of deciding whether to produce an incremental amount of a petrochemical.
A follow-on session looks at different measurements of profitability and types of margins. The concept of value chains is also explained.
The concluding session turns to petrochemical pricing with a discussion on price setting mechanisms and inter-regional prices. Both short term and long term factors which influence future prices are covered.
Time permitting, there is a review of the day and a short quiz.
