Petrochemical Prices: Is Ethylene Becoming The Bear
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© 2014 Platts, McGraw Hill Financial. All rights reserved. Is Ethylene Becoming The Bear October 04, 2014 1
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Platts Senior Analyst, Hetain Mistry, recently presented this slide deck at Platts Forum in Vienna during the EPCA conference. Key takeaways include: - The US to outweigh the Middle East in terms of cracker additions over the next ten years - The US will become a truly global PE export player - The Middle East will maintain its dominance in PE exports - CTO/MTO additions to add to global PE surpluses - Western Europe’s cracker industry will continue to suffer and options of sustainability are far and few between - Western Europe will see its PE import requirement rise
Transcript of Petrochemical Prices: Is Ethylene Becoming The Bear
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Is Ethylene Becoming The BearOctober 04, 2014
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• A shift to ethane • A look at the US – How are the shale based investments evolving?
• A look at the Middle East – How are the dynamics changing?
• A look at China – How is MTO/CTO capacity developing?
• What are the options for Europe?
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Agenda
• The US to outweigh the Middle East in terms of cracker additions over the next ten years
• The US will become a truly global PE export player• The Middle East will maintain its dominance in PE exports• CTO/MTO additions to add to global PE surpluses• Western Europe’s cracker industry will continue to suffer and
options of sustainability are far and few between• Western Europe will see its PE import requirement rise
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Key Takeaways
Cheap US NGL Prices To Encourage Investment
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Plenty Of Ethane To Meet Demand, Use Of Naphtha Declining
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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
000 mt US Ethylene Output to Rise
Gas Oil Full‐range Naphtha Naphtha Butane Propane Ethane
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US Cracker Projects Update
Source: Platts Petrochemical Analytics
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Maybe Four More US Crackers
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Jan‐14
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b/d US Cracker Potential
Cracker Potential
There Will Be Surplus Polymers From The Americas
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Gas Prices Remain Cheap In The Gulf
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Saudi Arabia Qatar UAE Iran
$/btuRegional Ethane Prices
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The Middle East Will Remain The Global Supplier
Source: Platts Petrochemical Analytics
China CTO, What Is Already Happening
Source: Platts Petrochemical Analytics
China Will Continue To Build‐ Aggressive Plans For Asia CTO/MTO Additions
Coal based olefin additions:
11.9 million mt of ethylene12.8 million mt of propylene
The Challenges And Issues
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China’s PE Gap Will Not Be Filled
The Ethylene Cost Curve‐ Europe Still Near The Top
Source: Platts Petrochemical Analytics
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Cost Curve Is Dictating Investments
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As A Result, The Global Feedstock Is Getting Lighter
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Everybody Building Around Europe
Source: Platts Petrochemical Analytics
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Europe Has High Feedstock Cost Compared To Other Regions
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Middle EastGas Price
EuropeanNaphtha
Price
EuropeanPropane
Price
EuropeanButanePrice
US EthanePrice
Us PropanePrice
US ButanePrice
NE AsiaNaphtha
Price
$/ton
Annual Average 2013 Regional Petrochemical Feedstock Prices
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Global Short‐Term PE Surpluses Will Squeeze Out Europe‐ Lower Prices
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Western Europe To Move To Deficit
What Are the Options?‐Will It Make Much Of A Difference
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• Buy the Gas• Drill for Gas• Be Flexible• Specialize• Integrate
Source: Platts Petrochemical Analytics
© 2014 Platts, McGraw Hill Financial. All rights reserved.
Thank you!
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Hetain Mistry, Senior Analyst, [email protected]
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