APLA ’09: US olefins need 10% cut in capacity - consultant

09 November 2009 17:58  [Source: ICIS news]

MEXICO CITY (ICIS news)--The US will need to trim its olefins capacity by at least 10% in 2010 to help reverse the weak economics in the sector, a consultant said on Monday.

“It won’t solve the competitiveness issue, but it is a start,” the source said on the sidelines of the 29th Latin American Petrochemical Association (APLA) annual meeting in Mexico.

The shutdowns would likely involve old liquid crackers, the consultant said, adding that US crackers will continue to rely on ethane as their primary feedstock.

Crude oil will break $100/bbl next year, but ethane will remain a competitive feed, the consultant predicted.

“Ethane will be king in the coming years,” the source said

US olefins producers will have to decide between putting money into crackers to make them more flexible or shut them down altogether.

“It will depend on what type of supply contract is involved, and it is not a simple decision to make,” the source said.

The continued lightening of US crackers would tighten output of heavier co-products such as aromatics, and that could be a profitable proposition for an olefins producer that decides to continue to crack liquid feeds.

“A well-run [liquid] cracker could do very well in that scenario,” the source said.

For more on olefins visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect


By: William Lemos
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index