Tag Archives | olefins

Lower oil prices support European cracker operating rates

Who would have believed, a few years ago, that European cracker operators would see an operating rate of 84% as something to celebrate?  It would have been thought a disaster prior to 2008, when rates typically ranged around 90%. But whilst nobody is flying flags, last year was the best year since 2007.  And as […]

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C2 OR% Sept12.png

European ethylene volume at 1998 low

European olefin markets had a miserable time in Q2. As the chart shows, based on APPE data, ethylene production (red square) was just 4.7MT. This was the lowest Q2 volume since 1998. Of course, crackers had switched severity to produce more propylene and butadiene. But even propylene volume at 3.6MT was the lowest Q2 volume […]

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Satchell May11.png

Petchem volumes slide in all 3 major regions

Volume is a key driver for chemical company profits. High volume means operating rates increase, reducing unit costs. Companies also gain more pricing power. But when volume is low, the reverse happens. Thus the above chart from leading analyst Paul Satchell of Collins Stewart is telling an important story. It shows: • Volumes were very […]

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C2 OR% May11.png

Europe’s supply-led ethylene market continues

Q1 saw near record margins for European petchem producers. And there was also a scramble for product, as buyers rushed to secure product ahead of feedstock price-related increases. But this remained a supply-led market. As the chart above shows, based on APPE data, Q1 production (red triangle) was just 5.1 million tonnes. It was slightly […]

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C2 margins Feb11.png

Asia’s olefin margins weaken vs Europe, USA

The ICIS weekly margin reports continue to provide essential reading for anyone in the petrochemical value chain. The above chart is particularly fascinating, as it highlights the significant differences between cracker margins on a regional basis over the past 2 years: • Europe (red column) is the clear winner over the period. Its margin bottomed […]

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C2 OR% Jan11.png

European ethylene at 82% operating rate in 2010

European operating rates (OR%) for ethylene averaged just 82% in 2010, according to APPE data this week. This meant there was no improvement over H1 OR%, suggesting the recovery from 2009′s 76% OR% has stalled. Of course, in terms of profitability, 2010 will have been a great year. The industry did its usual excellent job […]

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C2 v C3 C4 Jan11.png

Olefin ‘spreads’ remain volatile

Last March, the blog highlighted the major changes taking place in ethylene, propylene and butadiene prices versus naphtha. It also analysed them in ICIS Chemical Business in September. The above chart now summarises the 2010 outcome, using European prices to enable comparison over the last 30 years. It was a most remarkable year. The chart […]

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C2 OR% Nov10.png

Europe olefin operating rates remain at 82%

Q3 showed no real improvement in European cracker operating rates (OR%). As the chart shows, based on APPE data, these remained at 82% for the Q1 – Q3 period. Of course, this is much better than the 76% OR% seen in 2009, but it would not normally be a matter for celebration. However, the ‘silver […]

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HDPE May10.png

Asian polymer prices and margins begin to fall

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 […]

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Cracker margins remain under pressure

The chart above, from Paul Ray’s excellent ‘ICIS Weekly Margin Report’, clearly shows the level of pain currently being suffered by naphtha-based cracker operators. Based on European pricing, it also demonstrates the great difference between today’s recession versus the ‘dip’ of 2002/3: • Margins based on contract prices fell to €151/t in January • They […]

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