APLA '13: US PE margins will shrink on global overcapacity

19 November 2013 15:19  [Source: ICIS news]

CARTAGENA, Colombia (ICIS)--US polyethylene (PE) margins will shrink significantly as global overcapacity builds over the next five years, an industry expert said on Tuesday.

"We don't expect to be making any money on PE exports as this capacity hits," the source said on the sidelines of the Latin American Petrochemical Association (APLA) annual meeting.

The consultant said its company expects to be making some money on the ethylene, but added that upstream is where better margins will be seen.

"Where the money is to be made is on the extraction of ethane from the wet gas stream," the source said.

Most of the new capacity being built are low-cost facilities, the source added.

Producers should look for those low-cost feedstocks, especially during a period of overcapacity, the source said.

The APLA conference ends on Tuesday.

By: Leela Landress
+1 713 525 2653

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