ChemOrbis Gaziantep Petrochemicals Summit: Feedstock shift to shape new capacities
Hoar focused on the prevailing dynamics in the energy and petrochemical markets, especially in ethylene and propylene markets and derivatives thereof, as well as the main reasons behind the need for new capacities across the world.
Highlighting that each region has its own unique feedstock and market position that shape investment trends, Hoar reported that major petrochemical producers are set to start up their new crackers in the US by the end of 2017, thereby benefiting from cost advantages of ethane as feedstock while in China, high availability of coal led to the development of coal based technology and MTO.
Regarding the ongoing and upcoming new ethylene and propylene capacities, Hoar reported that steam cracker developments will dominate the new ethylene capacities while on-purpose propylene capacities including PDH and methanol conversion units (MTO) have gained a substantial size in the recent year due to a shortfall in propylene supplies from steam crackers which are switching to use cost-advantaged light feeds.
For propylene production, meanwhile, the new PDH units are set to meet propylene needs in the US over the short to medium term due to the shift to ethane-based olefins production which has led a reduction in the amount of co-products compared to those of heavier-feed crackers. Similarly, in China, new on-purpose propylene capacities are expected to meet the growing demand especially from the PP markets. In the West Europe, the change in feedstocks is also causing lower propylene production, which is expected to move the market to on-purpose production in the future.
On the pricing and profitability, Hoar said that global petrochemical profitability has improved particularly in Europe whereas the lower crude oil prices have reduced the advantage of the Middle East.
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