29-Dec-16 Derivatives units expected to come online in 2017 ahead of delays in new cracker capacity are boosting spot ethylene prices into the first half of the year, as per argusmedia.com. Construction problems and delays in finding skilled staff to operate the new plants are pushing ethylene capacity expansions back by 6 to 9 months, which should create a short-term demand pull on ethylene for 2017. Producers are bringing new polyethylene units online mid-year, ahead of new monomer capacity, and are expected to whittle away existing ethylene inventories until new capacity to feed the derivatives units is online.
As cracker turnarounds and expansions wrapped up beginning in November, spot ethylene prices fell to 21.375¢/lb on 10 November, the lowest price since February, because of reduced demand. Ethylene rebounded late in 2016, trading above 26¢/lb on 8-13 December, with first quarter prices seen at a premium to December and an even larger contango shown for the second quarter.
ExxonMobil Chemical, Chevron Phillips Chemical and Dow are all scheduled to bring new Gulf coast ethylene and polyethylene production online during 2017. ExxonMobil's 1.3mn t/yr polyethylene expansion in Mont Belvieu, Texas, Dow's new 1.05mn t/yr polyethylene facility in Freeport, Texas, and CP Chem's two 500,000 t/yr PE units in Old Ocean, Texas,are expected to come on line around mid-year. Dow's 1.5mn t/yr cracker in Freeport is also expected to start up around that time, ExxonMobil's 1.5mn t/yr cracker in Baytown, Texas, and CP Chem's 1.5mn t/yr cracker at its Cedar Bayou site in Texas are expected to come online either late next year or early in 2018.
Additional cracker turnarounds expected in February, March and April and could lend further support to ethylene prices, but price support from past spring turnarounds was mixed. In the second quarter of 2015, ethylene prices at Mont Belvieu, Texas, averaged 29.91¢/lb, up 15pc from the rest of the year, while second quarter 2016 pricing averaged 9pc under the overall 2016 average of 26.99¢/lb.
(Source Courtesy: Argus Media)
Previous News
Next News
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}