Major change is underway in world markets for all petrochemicals. It is no exaggeration to say that we now face chaos on the supply and demand side – affecting both feedstocks and products. Producers and consumers cannot afford to ignore the risks that this development creates for their business. Nor can investors afford to indulge […]
Tag Archives | feedstock pricing
There has been a dramatic shift in cracker feedstocks in the USA over the past 2 years, as crude oil prices have risen. Many US producers have been able to switch to ethane feed, and as a result have become some of the lowest-cost ethylene producers in the world. As the chart* shows: • In […]
Oil markets are now in their longest-ever period of contango. This is when prices for future months are higher than current levels. According to Bloomberg, they have now been in contango for a record 656 days. Keeping a barrel of crude in a tank on land costs 60 – 70 US cents/month, whilst hiring a […]
The Petromatrix report is currently a must-read for anyone seeking to understand what is really happening in crude oil markets. Its latest issue analyses China’s demand. It suggests this is not as strong as the bullish investment banks on Wall Street might wish. China’s refinery runs are certainly rising, as its new major capacity comes […]
Sometimes every cloud does have a silver lining. And that’s currently the case with the fall in demand for oil products. The European petchem industry is based on feedstock from refineries such as naphtha and LPG. And as the chart above from the IEA shows, German refinery runs, like others elsewhere in Europe, are down […]
A month ago, Nigel Davis called attention in his ICIS Insight column to the alarming fall taking place in US ethylene values. He noted that “inventories seem to have filled“, and presciently concluded that “buyers have been on the look-out for the turn and, by all accounts, expect any downward movement to be swift and […]
The excellent ICIS European margin report for ethylene shows an interesting picture this week. The chart above compares contract margins based on naphtha (red line) and LPG (yellow line) feedstock. Both have been slipping since September, when they peaked at €398/t and €357/t respectively. This week, they are over 40% lower, at €232/t and €208/t. […]
Natural gas is a major feedstock for US chemical producers. So the problems caused by the rush to buy a fund that “invests” in the natural gas futures market, are a concern. Olivier Jakob of Petromatrix has been warning for some time that the UNG fund was becoming too large. Investors have been so keen […]
In another sign of the economy ‘bouncing along the bottom’, US drivers appear to have returned to the road in recent months. Latest figures from the US Highway Administration show a 0.1% rise in vehicle miles travelled during May, the second consecutive month of positive growth since 2007. But this is unlikely to provide much […]
For the past 40 years, the aromatics industry has usually had to ‘bid away’ its feedstock from the octane and gasoline pool. The only exception took place in S Korea during the early 1990′s, when local gasoline demand was low. This gave the new S Korean paraxylene (PX) producers the lowest cost base in the […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.