14 June 2013 09:28 [Source: ICB]
Polyethylene capacity in North America could increase by 5.58m tonnes/year in a very short time. Ten companies are planning 11 new expansion projects
prepare for a plethora of plastic pellets. The groundbreaking at NOVA Chemicals' new 1m lb/year (454,000 tonnes/year) linear low density polyethylene (LLDPE) plant in Alberta, Canada marks the start of a huge wave of polyethylene (PE) capacity set to come online between 2015-2017 in North America.
Already 10 companies have announced plans to expand PE capacity in the region, and between the 11 planned projects nine have defined capacities amounting to a total of 5.58m tonnes/year. This represents a 28.7% boost to the existing North American capacity of 19.4m tonnes/year, according to an analysis by ICIS - all potentially in the span of about three years.
For ethylene, US capacity could rise by 39.6% by 2020 if all the planned projects are completed.
In May, Formosa Plastics revised upwards the capacity of its planned ethane cracker in Point Comfort, Texas, from 800,000 tonnes/year to 1.2m tonnes/year.
That move brought the tally to 10.5m tonnes/year of new ethylene capacity planned.
While some of the PE production will be absorbed by the growing US economy, much will be targeted for export - especially in light of the improved cost position for US producers.
For 2012, US export sales of PE accounted for roughly 17-22% of total sales for the year, according to the American Chemistry Council. By 2020, some analysts predict that share could rise to as much as 42%.
Additional contribution from Becky Zhang in Singapore and Michelle Klump in Houston
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