Muscat – The chemicals and petrochemicals industry in the Arabian Gulf is poised for growth in 2021-2022, as the regional and global economy is forecast to recover in the aftermath of the COVID-19 outbreak.
According to the Gulf Petrochemicals and Chemicals Association (GPCA), the region’s chemicals industry is anticipated to see growth across all key indicators including chemical sales revenue, production output and international trade on the back of an increase in regional economic activity, supported by a rapid vaccination rollout and the global economic rebound.
According to the World Bank, GCC economies are expected to return to an aggregate growth of 2.2 per cent in 2021, buoyed by global economic recovery, projected at 5.6 per cent and the revival of global oil demand and international oil prices. Earlier this month, Brent crude rose to its highest levels since October 2018, reaching US$86.04 per barrel.
In a press statement, GPCA, which is the voice of the chemicals industry in the Arabian Gulf, said higher oil output combined with an improved oil price outlook are boosting fiscal revenues in the region, as hydrocarbons generate significant revenue for the GCC.
‘This, combined with strong economic and manufacturing activity in China, which represents the GCC’s largest export market, GPCA forecasts a healthy chemicals and petrochemicals GCC market outlook, which will spill into 2022.’
Nevertheless, supply chain delays and disruptions will likely persist, leading to an increase in the cost of commodities, including some of the chemical industry’s key inputs. With higher oil prices, feedstock prices are expected to remain elevated, and margins to decrease, GPCA said.
To discuss these trends and highlight the chemicals industry’s role in a post-pandemic recovery, the Annual GPCA Forum will convene global and regional industry leaders from over 500 companies in 50 countries during December 7-9 at the Madinat Jumeirah, Dubai, UAE.
Dr Abdulwahab al Sadoun, secretary general of GPCA, said, “The chemicals industry in the region is emerging from a period of significant disruption, subdued growth and an unprecedented decrease in consumer demand in a range of end-user sectors, which chemical producers serve. At the same time, the industry demonstrated resilience like never before, as it fulfilled its vital role to serve society’s needs and help equip the healthcare industry with the equipment and materials it requires to combat the spread of the virus and distribute the vaccine.”
“The Arabian Gulf region is now entering into a gradual recovery which will require it to maintain resilience and keep production output high in order to cater to end-user markets at home, in Asia and the world,” he added.