24 October 2013 16:54 [Source: ICIS news]
LONDON (ICIS)--Reaction from European olefins players to the potential definitive shutdown of INEOS’s petrochemical site at Grangemouth in the UK has been muted.
The short-term view was that the closure of the site’s two crackers would not be having much, if any, impact on current European ethylene and propylene balances.
The larger of the two crackers – KG – was widely thought to have been running for some time at 50% of nameplate capacity anyway.
Additionally, a maintenance turnaround was also widely expected to have been planned for late in the third quarter or early in the fourth, though this is unconfirmed by the company.
“INEOS were not running flat out,” said an integrated producer.
Both ethylene and propylene markets in northwest Europe are balanced-to-long despite ongoing maintenance at at least five other crackers.
This is because demand is fairly soft, partly because of ongoing poor macroeconomic conditions but also due to the expectation that November contract prices will decrease. The rapidly approaching year end is also seen as a contributory factor.
“Ethylene is still available, [key derivative] polyethylene (PE) is slow, but other derivatives are stable,” a second producer said.
An ethylene consumer said: “There is more than enough ethylene in Europe, crackers are underutilised anyway.”
The general longer-term view was that Europe was still needing to rationalise cracker output. Much of its cracker operations have been rendered less economical in the face of the feedstock-advantaged US and Middle East.
Versalis, Total, Repsol announced changes to their olefins systems this year in an attempt to offset the pressures from elsewhere.
“Maybe it [a definitive closure of the site] will sort the ethylene balance,” an industry observer said.
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