APLA '10: US olefins capacity likely to increase - consultant

07 November 2010 19:30  [Source: ICIS news]

RIO DE JANEIRO (ICIS)--US olefins capacity will likely increase in the coming years as ethylene producers will take advantage of growing ethane availability at competitive costs, a consultant said on Sunday.

US ethylene is balanced now but the market will be tight by 2013 if demand remains strong, the consultant said on the sidelines of the 30th Latin American Petrochemical Association (APLA) annual meeting in Rio de Janeiro.

According to the source, capacity growth would probably result from expansions by producers already established in the US.

But the consultant did not rule that a newcomer may decide to enter the US market and build a cracker from scratch.

The estimated the cost to build a cracker is $2.0bn (€1.4bn), according to the source.

If it happens, it would be a new player and not one of the majors already making ethylene in the US, the consultant said.

Talk of US ethylene capacity additions emerged in recent months on the back of continued projections that US ethane supply will remain abundant in the foreseeable future.

Ethane is credited with making the US the world’s second-most competitive ethylene producer due to its cost advantage over heavier feeds, such as naphtha.

The US has 42 crackers with ethylene capacity estimated at 57bn lb/year.

Ethane accounts for around 60% of the US feedstocks used to make ethylene.

The 2010 APLA conference began on Sunday in Rio de Janeiro with nearly 800 delegates.

The event runs through Tuesday.

($1 = €0.71)

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By: William Lemos
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