13 April 2010 22:13 [Source: ICIS news]
Speaking during a Tuesday morning conference call, Digvijay Singh, a Middle East and
Pure ethane is sold for 75 cents/MMBtu in
“If you look at the propylene side of things, the advantage is a lot less. Propane is sold at a 30% discount to equivalent naphtha net-back basis price in Saudi Arabia, which obviously reduces the extent of the advantage that Saudi producers have in the propylene segment,” said Singh.
Singh noted that the bulk of new capacity coming on line in
“Even so, the marginal producer’s costs are probably four times more expensive at a bare minimum, compared to a Saudi producer, even on a mixed-feed basis,” he continued. “This implies that Saudi producers are the most cash-cost competitive capacities globally.”
Singh pointed to shifting cracker operating rates May-December 2008 to illustrate the impact of the cost advantage. Crackers in Europe went from 85% to 60% during that period, while in
“The Middle East actually ramped up cracker operating rates and was gaining market share – probably the only region in the world, outside of South America, where there is some marginal capacity, to be increasing operating rates going into the [economic] crisis,” he said.
($1 = €0.74)
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