Global ethylene demand to outstrip supply - US Dow

13 September 2011 21:44  [Source: ICIS news]

HOUSTON (ICIS)--The world's demand for ethylene will outstrip supply, causing 2012 operating rates to increase even with 2% GDP growth, US-based Dow Chemical said on Tuesday.

If GDP growth is less than 2%, older naphtha crackers in Asia and Europe would be the most vulnerable, Dow said during the Credit Suisse Group Global Chemical and Ag Science Conference.

In the US, Dow stands to benefit because it can rely on the country's cheaper ethane-based feedstock, company said.

In particular, the US should have excess ethane because of the development of its shale-gas reserves, Dow said. In fact, futures markets have already priced in the excess ethane supply.

To take advantage of this cheaper feedstock, Dow has signed a memorandum of understanding (MOU) to access additional ethane supplies from the Marcellus shale in the northeast US, the company said.

On the ethylene side, Dow plans to restart a cracker in Louisiana by the end of 2012 and to increase ethane flexibility at a second cracker in the state in 2014, the company said.

In Texas, Dow plans to build an on-purpose propylene plant and increase flexibility of a cracker, the company said. On the US Gulf coast, Dow plans to build a world-scale cracker, with start-up in  2017.

For more on ethylene visit ICIS chemical intelligence
For more on Dow visit ICIS company intelligence

By: Al Greenwood
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