Use of heavier feeds for US ethylene rises in Q4 – NPRA

12 February 2010 23:16  [Source: ICIS news]

HOUSTON (ICIS news)--US olefins producers continued to run mostly light in the fourth quarter of 2009, but there was an uptick in the use of heavier feeds that snapped a steady downtrend, the National Petrochemical & Refiners Association (NPRA) said on Friday.

NPRA's latest quarterly survey did not give the usual full details on feedstocks from natural gas liquids (NGLs), in keeping with its policy of not reporting data that would identify the respondents.

But based on a combination of the data NPRA did supply and on an ICIS pricing estimate, the proportion of lighter feedstocks in fourth-quarter ethylene production slipped to around 73%, down from the 75% reported by NPRA for the third quarter.

The share of feedstocks heavier than C4s is estimated to have risen to 27% in the fourth quarter from NPRA's reported 25% in the third quarter. NPRA reported the actual consumption of heavier feedstocks as rising to 7.139m lb from 6.291m lb.

The latest heavy feed share compares with 47% reported for the fourth quarter of 2008, when actual consumption was 10.753m lb.

US cracker operators have been steadily lightening their feedstock slate to take advantage of the divergence between crude oil and US natural gas prices, with the latter held down by weak demand and ample supply as oil values rose from a nadir in early 2009.

The US olefins industry is expected to continue to extend its ability to switch between light and heavy feedstocks.

In December, LyondellBasell shut down its Corpus Christi cracker in Texas for a turnaround that will allow the unit to run mostly on NGLs. The cracker is scheduled to be restarted by the end of February.

At least two other US crackers have become more feedstock flexible in recent months after undergoing maintenance, according to market participants.

The lighter feed slate has reduced the supply of co-product propylene and crude C4, the feedstock for butadiene.

That has helped drive US prices for propylene and butadiene sharply higher in recent months, in turn improving the economics of crackers running on heavier feeds.

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By: William Lemos
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