Tag Archives | ethylene

Oil price fall creates major inventory risk for chemical markets

Oil prices have now fallen $50/bbl since I forecast their collapse in August.  But it is only recently that companies and investors have begun to realise this price fall is real, and not just a minor blip.  As a result, few have yet recognised the extent of the collateral damage that is likely to appear in […]

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US shale gas bubble will end in tears for ethylene expansions

A return to lower oil prices is good news for the global economy.  But it is bad news for all those who have invested in expanding ethylene production on the assumption that US gas prices would maintain the temporary advantage of recent years.  As the chart shows: Oil (blue line) has around 6x the energy […]

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Shell CEO says Europe needs to leverage chemicals clusters

There are 2 ways to improve operating rates in an industry.  One is to increase volumes, the other is to reduce capacity.   The latest APPE data covering H1 2014 for European olefin capacity highlights how the European petrochemical industry has successfully used both mechanisms over the past year to improve its position: Ethylene volume increased to 9.8MT, versus […]

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US ethylene outages boost European and Asian PE producers

Polymer traders must be already counting their end-of-year bonuses, as the value of the US$ rises whilst crude oil prices weaken.  The biggest bonuses will likely go to polyethylene (PE) traders competing with US producers. The reason is that US ethylene spot prices are currently at record levels.  An astonishing 10% of US ethylene capacity has been out […]

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EU cracker operating rates remain near record lows

An ageing population and record annual levels of oil prices create massive headwinds for Europe’s petrochemical producers.  One means demand growth is much reduced from the SuperCycle.  The other means these lower volumes cost more to produce. What a pity, you might say, that the industry is not part of the financial sector.  Then it […]

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US shale gas expansions highlight lack of demand

One good thing may come out of the current excitement over the US ethylene expansions being discussed on the basis of shale gas developments. Boards may decide to look at seriously at the way yesterday’s ‘demographic dividend’ has now become today’s ‘demographic deficit’.  That would be a major step forward for the US and the […]

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C2 pricing Jan14

Ethylene prices have 96% correlation to oil prices

Companies are about to review their Q1 performance, and re-forecast profit and revenue for the rest of the year.  Most will be disappointed with results so far, as the long-promised economic recovery has again failed to appear. This will be no surprise to blog readers.  But there is another and connected issue for Management Teams to worry […]

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European ethylene production at 1996 low

Nobody was expecting very much from Q4 ethylene production in Europe, as several plants had been taken offline in December due to lack of demand.  And yet it is still possible to be disappointed by the actual outcome as reported by APPE.  As the chart above shows: Q4 production at 4.4MT was the lowest since the […]

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Demand now the key driver for future US petchem profitability

Will the US be able to sell all its planned new petchem volumes?  That is the 3rd topic in the blog’s series about critical areas where we all think we know what’s happening, but may end up being surprised. We all know that the US now has a major feedstock advantage versus Europe, Asia and Latin America due […]

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Ethylene demand weak as eurozone flirts with recession and deflation

So this is as good as it gets in 2013.  That seems to be the sad conclusion from analysis of Q3 operating rate (OR%) data for Europe’s crackers.  Actual Q3 OR% inched up to 81%, which was slightly better than 2012′s 80% rate and 2009′s 79% rate.  But its a very long way from the […]

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