High costs to be talking point at olefins conference

21 May 2007 18:08  [Source: ICIS news]

ANTWERP, Belgium (ICIS news)--As olefins producers in Europe continue to struggle with increased naphtha prices ahead of the bi-monthly ethylene settlement for June-July, key industry players are set to meet on Tuesday for the fourth ICIS World Olefins Conference.
Naphtha cargoes sold as high as $712.00/tonne last week in northwest Europe, and olefins producers have said further hikes could lead to negative margins for cracker operators.
One of the main talking points at the conference was expected to be the June-July bi-monthly ethylene contract, which was expected to feel the pressure from upstream price rises.
Most European commentators have forecast a drop in polyethylene (PE) operating rates from around 2009, particularly as new capacity comes on stream in Saudi Arabia.
The recently announced Saudi Aramco and Dow Chemical petrochemicals joint venture at Ras Tanura, Saudi Arabia, would be the latest in a rush of new olefins capacity scheduled to come on stream in the region in the next decade.
The new Middle Eastern propylene and polypropylene (PP) capacity has caused some PP producers to forecast Europe moving to a net importer from a net exporter.
Chaired by SABIC Europe’s olefins business manager Joe Duffy, the two-day conference in Antwerp will feature experts from all the key regions.
Representatives from polyolefins majors Basell, Reliance Industries and Borealis will discuss how the global market is changing amid increasing supply from emerging economies.
Logistics will also be on the agenda. Before the talk of lower prices came in European spot ethylene, a main concern had been locating vessels to use to import material, whether from Asia, the Middle East or South America.
ICIS news will provide continuous news updates from the conference during the next two days.

By: Mark Watts
+44 20 8652 3214

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