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Ref.: exposure to petrochem sector by oil co's.

The pet chem industry worldwide goes thru severe price erosion for all products, and the pricing picture for next 1-2 years looks pretty bad indeed........most pet chems are near or at alltime low levels and (new) Asian pet chem capacities don't know where to sell the stuff.....but 1 thing is for sure: they all need to export out of the Asian all global pet chem markets experience severe price erosion due to the fall out of the Asian crisis.........and we ain't seen nothing yet......worse to come!
But......the major oil/pet chem integrated co's like exxon/shell/chevron/etc.. don't feel so much of this price erosion due to their integration AND the very low feedstock costs, i.e. crude/naphta/LPG.
With depreciated plant + equipment, low interest rates and reduced working capital requirements these oil/petchem majors still get small (but positive) returns on their petchem sector........I would be much more worried with (new) petchem players with recently built capacities, high debt levels, non-integrated and surplus capacity built up vis-a-vis their local market demand for the petchem products.
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