The market was left very quiet in Europe at the beginning of October as almost 3,000 chemical market players attended the 51st EPCA in Berlin. Current tepid market conditions did not dampen the mood at the conference, which was remarkably upbeat considering. Many believe the market has bottomed out, and compared to last year when talk at the conference was more sombre following the Brexit vote and gloomy market undertones, this year delegates were more positive. Some of this more positive sentiment could be attributed to the fact European chemicals have been having a good year; cracker margins are good, low oil prices have been keeping feedstock costs down and a stronger economic recovery in the eurozone, fuelled by central bank stimulus, all of which has booked profits for companies. In fact, petrochemical companies are wanting to invest in Europe again, to take advantage of the region’s large and sophisticated downstream markets. Also lower crude oil prices have helped change the operating environment thereby stimulating economic growth. However, there was concerned chatter that the tapering of quantitative easing planned by the European Central Bank (ECB) and the potential for a fallout from Brexit could stifle prosperity. Some economists have been questioning whether the compound annual growth rate of 2% in the eurozone is sustainable once the ECB starts tapping its QE programme, which could happen 1H 2018.
DIGITALISATION Another big topic at the annual meeting was the digitalisation of the petrochemical industry. From producers, traders, logistics providers and consumers, there are a range of new digital technologies spurring discussions on their uptake and applications. Certain technologies have the potential to “disrupt” businesses and supply chains, opening-up opportunities for current and new participants. For producers in Europe to remain competitive, significant changes in the ways in which data is handled and the impact on logistics capabilities was an important topic. Although by comparison European chemical companies are said to be digitally more advanced than their counterparts in other regions, the immediate challenge is from new, lower cost capacities. Having the flexibility to adapt to new technologies and ideas is key to survival, and many agreed that to be able to grasp the industry’s digital opportunities, companies would have to employ new talent.One other key development of the meeting is that Marc Schuller (executive VP of Arkema) will replace Tom Crotty (director of INEOS) as the new president of EPCA.