20 June 2008 05:09 [Source: ICIS news]
BANGKOK (ICIS news)--High crude prices above $100/bbl have provided a silver lining for some in the vinyls industry when compared to other naphtha-based derivative products such as polyethylene (PE), said a senior industry consultant on Friday.
"Higher crude prices provide greater advantage to PVC over PE in terms of cost of production and competition," said Charles Fryer chairman of consultancy Tecnon Orbichem while presenting at the 12th Asian Chlor-Alkai conference.
He added that the current premium of $400-500/tonne PE had over PVC was due to the lower energy content PVC compared to PE. However, rising calcium carbide raw materials have raised the cost of acetylene-based PVC production in China and could dampen this advantage should coal and calcium carbide costs continue to rise.
Vinyl chloride monomer (VCM) exporters and most ethylene dichloride (EDC) exporters who sell into China would also bear the brunt of high naphtha/ethylene costs due to rising crude, he added.
The two-day conference, organised by ICIS and Tecnon OrbiChem, ends on Friday.
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