Tag Archives | ethylene

Asian ethylene margins soar on China stimulus, plant outages

Volatility is one of the blog’s key themes for the next few years, as the world transitions to slower growth and a more regional economy.  And the chart above from the latest ICIS pricing Asian ethylene margin report highlights this new trend very well: Margins jumped 42% last week to reach $290/t, based on naphtha […]

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High oil prices take European operating rates to record lows

Life doesn’t get any easier for Europe’s olefin producers and the consumers who depend on them.  As the chart shows, based on latest APPE data, operating rates averaged just 78% in H1.  This is almost as bad as H1 2009, when they were 76%.  And it is a long way away from the 90% levels […]

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Lack of demand threatens US ethylene expansions

The above chart paints a depressing picture for anyone thinking it should be easy to make money via a major US ethylene investment based on cheap ethane from shale gas.   It shows 2012 ethylene production (red column) was still below SuperCycle levels, as were volumes for the two major derivatives – polyethylene (blue) and PVC (green).  It highlights how lack of demand […]

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Sinopec focuses on political and social targets

Sinopec is China’s main company in refining and chemical markets. Although it is listed on world stock markets, the government remains its largest shareholder with a 76% stake. As such, it follows government priorities rather than western commercial logic. The chart above, from the blog’s major new study of the company, highlights some of the […]

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EU olefin operating rates slip back to 81%

The latest EU olefin operating rates (OR%) were very disappointing, even though they were not a surprise. As the chart shows, ethylene rates were just 81% (based on APPE data). They were far below the 90%+ rates that were normal before the crisis began. These rates would normally have left the industry in crisis mode […]

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EU ethylene output highlights recession risk

Latest data from the IMF shows that the EU remains the world’s largest economic unit. Its GDP in 2010 was $16.2tn, 26% of the global economy. The USA was next with $14.5tn, and China 3rd with GDP of $5.9tn. So what happens in Europe matters greatly to the global economy. Equally, petchems are one of […]

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Supply shortages drive olefin market profitability

The above chart would have seemed unbelievable at any time in the past 30 years. It shows the performance of propylene and butadiene relative to ethylene. Not because it shows butadiene prices racing ahead relative to ethylene (green line). This happens routinely during a downturn, as tyre demand is more robust than for polymers. If […]

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Sinopec adds capacity as China’s ethylene growth stalls

Sinopec is China’s leading petchem producer. Its H1 results, out this week, confirm the blog’s concern that China’s growth surge has stalled. The chart shows Sinopec’s view of domestic demand growth for ethylene (blue line). After falling to zero in 2008 as the Great Recession began, growth rebounded to ~10% in 2009-10. But in H1 […]

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Goldman halves global ethylene growth estimate

Goldman Sachs today halved its estimate for global ethylene growth to ~2.5%, and slashed its earnings estimates for some major US companies. Analyst Robert Koort warns: “Our outlook for earnings growth has decelerated substantially in recent weeks … Our economists now expect US GDP to grow only 1.7% in 2011 and 2.1% in 2012 vs. […]

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European cracker margins at ‘top of cycle levels’

European cracker margins are currently “at top of cycle levels” according to INEOS last week. But as the above chart shows (based on APPE data), they remain supported by supply issues rather than demand. Operating rates actually slipped to 81% in H1, a figure more normally associated with a downturn. Detailed output figures for Q2 […]

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