Price and market trends: US cracker boom may create long ethylene market

05 April 2013 09:35  [Source: ICB]

The numerous producers that are either expanding existing US crackers or building new ones could create a long ethylene market and a potential boon for consumers of the monomer, the head of Huntsman said on 25 March.

 Huntsman sees long C2 market

The derivative projects that would consume this growing source of ethylene have yet to keep pace with the new cracker announcements, said Peter Huntsman, the company's CEO. Huntsman made his statements on the sidelines of the International Petrochemical Conference (IPC), held by the American Fuel & Petrochemical Manufacturers (AFPM). The resulting rush of ethylene capacity could lengthen the market for the monomer, lowering prices for consumers, he said. "I think you are going to be better off as a buyer versus as a seller of ethylene."

Producers have also announced plans to build up to eight on-purpose propylene plants in North America, potentially creating a flood of supply for another key petrochemical feedstock.

However, the outlook for propylene is cloudier than that for ethylene.

Some producers may drop their plans for propane dehydrogenation (PDH) plants.

Supplies of propane could tighten, since the fuel could also be exported through the terminals that companies plan to build.

The PDH plants would also offset falling US capacity for propylene, as the switch towards lighter cracker feeds has reduced production of the monomer.

By: Al Greenwood
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