PODCAST: Ethylene derivatives polyethylene, PVC, MEG take hard hit from rising feedstock prices, winter storm

Author: Zachary Moore

2021/04/13

HOUSTON (ICIS)--Winter storm Uri that hit Texas in February and cause significant ethylene capacity shutdowns is continuing to have pricing effects on downstream products.

US polyethylene (PE), polyvinyl chloride (PVC) and mono ethylene glycol (MEG) have faced upwards pressure amid rising feedstock costs.

Most of the PE plants that had been shut down following the mid-February winter storm have since restarted, although average operating rates remain below normal due to lingering shortages of ethylene feedstock.

According to data from the American Chemistry Council (ACC) and Vault Consulting, PE inventory levels declined by 16.9% in February from January as strong demand and widespread outages caused a significant stock drawdown.

The February freeze knocked out as much as 74% of US PVC production capacity and moved an already thinly supplied market to critically short.

Improving feedstock ethylene supply has helped MEG supply increase, amid strong demand into packaging in the Americas as well as moderate demand for export.

Market experts Zachary Moore, Bill Bowen and Antoinette Smith discuss this and more in this podcast interview by Anna Matherne and Alex Snodgrass.