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Chemicals and the Economy

Propylene prices reach parity with ethylene

As promised on Saturday, today’s post looks in more detail at the major change taking place in the relationship of propylene to ethylene prices. When the blog joined the chemical industry in the 1970’s, propylene was often regarded as a disposal problem by many cracker operators. They ran their plants to produce ethylene, which was […]

European propylene, butadiene, prices rise above ethylene

A remarkable thing happened this week in European olefin markets. Contract prices for butadiene and propylene were finalised for April/Q2 at higher levels than for ethylene. This has never happened before, in Europe or other regions. The chart, based on ICIS pricing data, shows how ethylene (blue line) has normally been the highest priced olefin. […]

Polyolefin demand follows GDP/capita

The blog was in Vienna this week for a World Refining Association conference on the Global Petrochemical outlook. It had the privilege of chairing a very distinguished panel of industry leaders in a discussion about managing through the downturn. One of the key inputs came from Anton de Vries, LyondellBasell SVP, who had earlier shown […]

Propylene/Ethylene ratio drops

Propylene prices have been relatively strong in recent years, compared to ethylene. As the chart shows, they averaged 90% of the ethylene price between 2003-8. Now, however, they have returned to the historical 70% – 85% range. Propylene’s recent strength was well founded: • Benzene prices rose in 2004, making PP more attractive versus PS […]

LyondellBasell may be largest-ever bankruptcy

The financial fallout from the Lyondell (LBI) bankruptcy continues, as the banks slowly begin to acknowledge their losses. According to Bloomberg, RBS has taken a $1.47bn hit, Citigroup $1.4bn, and Goldman Sachs $850m. UBS are also believed to have lost at least $500m. But like Bank of America (new owners of Merrill Lynch), they have […]

Polymers demand slumps in Europe, China

ICIS news reports that polymer demand is falling sharply in two key markets, China and Europe. This is a bad omen for demand in other chemical markets, as polymers are closely tied to GDP growth. Linda Naylor reports that PE volumes in Europe may be down 7% in 2008. Meanwhile, John Richardson and Malini Hariharan […]

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