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The Mexican Petrochemical Sector in the NAFTA Negotiations

Georgina Kessel and Chong-Sup Kim

Year: 1993
Volume: Volume14
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No3-9
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Abstract:
Since 1985, there have been important changes in the Mexican petrochemical sector, including trade liberalization, deregulation and the elimination of subsidies. NAFTA represents another step towards liberalization of the sector. Given the low tariffs currently applied to international trade among the three nations, we do not anticipate major impacts of NAFTA on trade flows. Nevertheless, the elimination of restrictions to foreign investment is expected to increase capital flows into the sector and to promote productivity increases. On the other hand, the new barriers to trade in petrochemical feedstocks and the restrictions on private investment in infrastructure may negatively affect the sector's growth, making it necessary to adjust domestic regulations to improve the performance of Pemex.



Polypropylene Price Dynamics: Input Costs or Downstream Demand?

Lurion M. De Mello and Ronald D. Ripple

Year: 2017
Volume: Volume 38
Number: Number 4
DOI: 10.5547/01956574.38.4.ldem
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Abstract:
This paper investigates price dynamics between polypropylene (PP), propylene, naphtha, and crude oil together with proxies representing PP using industries. We test the dynamics in the South East Asian and North Western European markets. The paper is motivated due to the importance of the propylene and PP market in various downstream industries and importantly to aid producers in having a better understanding of how input costs and demand drive the prices. We employ a vector error correction framework, which facilitates testing different dynamics among the upstream and downstream prices. We find PP prices in both regions to be endogenous, albeit with some evolution over time, i.e., input costs and downstream demand factors tend to drive PP prices. In both regional markets shocks to naphtha and oil prices tend to be driven mostly by each other's price with little effect originating from PP and propylene prices.



The Role of the Petrochemical Sector's Exports in the Diversification of the Saudi Economy. A Scenario Analysis of the Foreign and Domestic Price Shocks

Fakhri J. Hasanov, Muhammad Javid, and Heyran Aliyeva

Year: 2024
Volume: Volume 45
Number: Special Issue
DOI:
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Abstract:
Saudi Arabia's petrochemical sector accounts for a significant portion of non-oil exports and has the potential to contribute significantly to the Kingdom's diversification. In this study, Autometrics-a machine learning method, was first employed to estimate export equations of chemicals and rubber-plastics for 1993-2020. The estimated equations were then integrated into a macroeconometric model called KAPSARC Global Energy Macroeconometric Model (KGEMM) and a scenario analysis was performed for the diversification effects of foreign and domestic price shocks till 2035.The scenario analysis showed that a 10% increase in foreign prices leads to 0.40 percentage point and 0.13 percentage point more diversified exports and economy on average for 2023-2035. Regarding domestic prices, a 19% increase in industrial fossil fuel prices and a 10% increase in ethane price result in less than a 0.1 percentage point contraction in the diversification of exports and economy if the revenues from the price reforms are not recycled back to the economy. The reforms can boost economic diversification by 0.05 percentage point if the revenues are recycled back to the petrochemical sector as an investment. If domestic price reforms are coupled with the investment in the petrochemical sector and 50% of this investment goods are locally produced, then diversification of Saudi export and economy enlarge considerably-by 0.20 percentage point and 0.26 percentage point, respectively.





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