23 September 2010 16:52 [Source: ICIS news]
By Will Beacham
LONDON (ICIS news)--Global chemical markets face major structural changes as lower refining rates and the switch to ethane cracking have knock-on effects for major building block substances, according to a UK-based consultant.
Commodity chemicals such as ethylene, propylene, butadiene, benzene and paraxylene will experience changes to pricing and availability in a new market environment, Paul Hodges, chairman of UK-headquartered chemical group International eChem told ICIS on Thursday.
Lower growth rates for oil products such as gasoline and diesel plus lower output from liquid feed crackers and more ethane cracking will make ethylene and paraxylene more freely available than in the past. However, propylene, butadiene and benzene are becoming more difficult to source, he said.
“For the first time ever, both propylene and butadiene are more highly priced than ethylene,” said Hodges. He explained that the shift to lighter feeds in the ?xml:namespace>
Declining gasoline demand in Europe and the
These structural changes which have caused the price of propylene to move into parity with ethylene raise some important questions for chemical producers, said Hodges: “Should producers invest in more on-purpose production? Will refining rates remain weak and what might the impact be of
Producers should also analyse whether propylene derivatives can be competitive at today’s higher relative prices. Also, “Will ethylene’s lower price, relative to propylene, raise its growth rate at propylene’s expense?”
He added: “Prudent producers and consumers might therefore want to develop a scenario-based approach to future planning.”
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