The
impacts on these three are different and
will have major Global implications for
players in different parts of the world
led by U.S.
www.CMRHouTex.Com
Introduction
Shale gas, being popularly called
Game Changer is the magic bullet
needed for U.S petrochemical industry,
The U.S petrochemical industry went
through major downturn in the last
decade and is positioned very well for a
full recovery.
U.S Impact
This article presents the current status
of Shale Gas and how it will impact the
major petrochemical products in (1)
Ethylene Derivatives, (2) Propylene
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2016
2016
2016
2017
2017
2017
Severalothersunderstudy
Expansions&Debottlenecking(Ethylenecapacityintons)
WestlakeChemical
LakeCharles,LA
110,000
2012
BASFTotal
PortArthur,TX
100,000
2012
DowChemical
Hahnsville,LA
400,000
2012
Williams
Geismar,LA
270,000
2013
Ineos
Alvin,TX
150,000
2013
WestlakeChemical
LakeCharles,LA
110,000
2014
LyondellBasell
LaPorte,Channelview,TX
600,000
2014+
DowChemical
Plaquemine,LA/Freeport,TX
500,000
2014+
WestlakeChemical
CalvertCity,KY
TBD
2014+
Source: Chemical Market Resources Inc. based on announcements
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be
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Exhibit 5: North American Ethylene Capacity (Base and High Cases), KTA
45,000
40,000
35,000
30,000
25,000
Mexico
Canada
US
20,000
15,000
10,000
5,000
0
1995
2000
2005
2010
2016 - Speculative
25,000
PE Demand (KT)
20,000
Exports to Others
15,000
Exports to Mexico
Domestic
10,000
5,000
0
1995
2000
2005
2010
2015 E
2020 E
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Exhibit
7
presents the
price of propylene with time.
The
tightness in the US propylene market,
relative to the ethylene supply, has led
to a growing premium for propylene
over ethylene. In Jan 2009, during
recession, propylene prices dropped to
nearly 20 cents/lb. But soon (by Jan
2010) due to the feedstock shift in the
crackers prices rose to about 65-70
cents/lb. For most of 2010 prices were
stable in the 50-60 cents/lb range mainly
due to softer downstream derivative
(PP, PO, AA, etc.) demand which
compensated (or relieved) the supply
tightness. But once the demand started
picking up in 2011, the prices went to
the range 75-90 cents/lb. Now the
demand seems to be picking up more
but the supply is at the same level.
These levels of volatility will continue to
be a characteristic of the US propylene
markets in the short-term.
In the US nearly 50 percent of the
propylene output has come from the
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3500
3000
USD/Ton
2500
2000
1500
1000
500
0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Chemical Market Resources Inc
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Conclusions
The decoupling of natural gas prices
from crude oil, driven by Shale Gas, has
made petrochemical investments in
United States attractive after over a
decade of stagnation.
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