Saudi Petrochemicals - NCBC

INDUSTRY OUTLOOKDuring 2003-2008, global supply of LDPE grew at a CAGR of 2.4%, outpacing thegrowth of close to 1% in global demand during the same period. Going forward, anexpanding capacity base along with slower demand growth is expected to limit themedium term rise in the producers’ utilization rates.Exhibit 12: Global LDPE production and utilization ratesMetric tons per annum (millions), unless otherwise stated30100%252090%1580%10570%060%1995199619971998199920002001200220032004200520062007200820092010E2011E2012E2013E2014E2015ECapacity Production Operating Rate (%)Source: NIC Presentation - Jacob Consultancy, NCBC Research estimatesLDPE DEMAND DYNAMICSWestern Europe, North America and China are the largest LDPE consumers bygeography, together accounting for close to 60% of global LDPE consumption of19mn mtpa in 2008. In the coming years, LDPE demand is expected to grow at aslower pace than witnessed historically, given the anticipated weakness in demandfrom developed economies which is expected to offset the consumption growth inMiddle Eastern and Asian countries (mainly China and India).27 April 2010 SAUDI PETROCHEMICAL SECTOR13