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 […]
Tag Archives | propylene
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 […]
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 […]
Almost unnoticed, an important shift is underway in propylene markets. Propylene (C3) is the second largest olefin after ethylene, with production around 75 million tonnes in recent years. Its main sources are steam crackers and refineries – neither of which see C3 as their core product. Thus the recent increased use of ethane as a […]
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 […]
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 […]
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 […]
Our annual Asian conference in Singapore (co-organised as always with ICIS) was very interesting this week. We had some fascinating presentations from major companies including Reliance and Thai Oil, and China insights from CICCC and Chemease. Shell’s GM for strategy, Alexander Farina, discussed changes in cost competitiveness between benzene (grey column) and propylene (red) over […]
Uncertainty over the Libyan situation is raising questions over the potential impact to its exports. The blog’s IeC colleague, Bob Townsend, has therefore done a quick analysis of the 3 main products that might be impacted – ethylene and propylene (blue columns), and methanol (green, right hand scale). As the chart shows, using data from […]
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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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 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.