Konstanz, Germany, June 12, 2014 --(PR.com
)-- Ethylene is the by far most important raw material in the petrochemical industry. Consumption is immense: the USA single-handedly processed 25 million tonnes of ethylene in the past year. As the first market research institute ever, Ceresana has analyzed the entire ethylene value chain in a specific region, namely the USA. "This is the worldwide first study of its kind, it provides complete transparency of the ethylene market, beginning with feedstocks up to the final products," explains Oliver Kutsch, CEO of Ceresana. "The value added in downstream sectors is considerable. Besides polyethylene plastics, direct applications of ethylene include important chemicals such as alpha olefins used to increase rigidity of polyethylene, ethylene oxide needed in the manufacturing of PET plastics, and ethylbenzene, which is predominantly processed into polystyrene. Other applications are vinyl acetate monomer and the elastomer EPDM."
Shale Gas Boom
Ethylene is mainly produced from ethane, propane, butane, and naphtha. The shale gas boom in the USA resulted in an unprecedented surge of announcements to construct new ethane crackers. Until 2018, US ethylene capacity is scheduled to increase by about half. Compared to other feedstocks, cracking of ethane yields a rather high amount of ethylene. Ceresana forecast approx. three quarters of ethylene output to be based on ethane in 2021.
Considerable Decline of Feedstock Costs
The notable decline of prices for ethane in recent years has caused a significant change of the cost situation for manufacturers of ethylene. Average feedstock costs per tonne of ethylene manufactured fell by about 40% between 2008 and 2013. Manufacturing ethylene from ethane enjoys a notable competitive advantage: In the fourth quarter of 2013, cash costs (consisting of fixed, variable operational and feedstock costs minus profit generated with by-products) were two thirds lower when using ethane than when using naphtha as feedstock.
Polyethylene Prime Application
In 2013, about 60% of US demand for ethylene was accounted for by producers of these plastics. Depending on density and rigidity of the product, polyethylene is classified as either HDPE, LDPE or LLDPE. In the future, ethylene will mainly be utilized to manufacture polyethylene: Large new production site for HDPE and LLDPE in particular are being constructed. Given the upturn of the real estate sector and ever increasing consumption expenditure, prospects for domestic demand in the USA are good. The impulses in construction and packaging have corresponding effects on demand for polyethylene. However, sales volume of polyethylene on foreign markets has to rise notably in the future in order to ensure an acceptable degree of capacity utilization of US facilities.
Export Hit PVC
The plastic PVC is manufactured via the intermediates ethylene dichloride and the vinyl chloride manufactured from it. In the past, notably more than 40% of US PVC output had been exported. This was a major support for the PVC industry that suffers from low domestic demand. Thus, the strong need for modernization of the water supply and sewage networks in the USA should have a positive effect on the demand for PVC.
The Study in Brief:
Chapter 1 depicts supply and prices of feedstocks and their effects on the ethylene industry - starting with crude oil and natural gas until ethane, propane, butane, naphtha, and gas oil. It also includes a detailed cost analysis of ethylene production, depending on the feedstock used. Data is given on fixed, variable operational, and feedstock costs as well as a comparison of cash costs and profits generated with by-products. Quarterly depiction of the years 2005 to 2013 and forecasts for the years 2013 to 2021 are provided.
Chapter 2 offers an overview over the market for ethylene in the USA: Market data regarding revenues development, demand and production, existing and future capacities as well as trade are explained in detail.
Chapter 3 analyzes the market for derivatives of ethylene. Data on demand, revenues, prices, costs, production, trade and a list of manufacturers including capacities is provided for the most important applications.
Headings 3.1. to 3.3. are examining the various types of polyethylene in more detail: HDPE, LDPE, and LLDPE. Chapter 3.4 analyzes the value creation starting from ethylene dichloride and vinyl chloride up to polyvinyl chloride. Chapter 3.5 examines the market for ethylene oxide and the downstream segments ethylene glycol, ethanolamines, and non-ionic surfactants. The following chapters are dedicated to derivatives of ethylene such as alpha olefins as well as the value chain from ethylbenzene and styrene to applications like polystyrene (PS), expandable polystyrene (EPS), acrylonitrile butadiene styrene (ABS)/styrene acrylonitrile (SAN) and styrene butadiene rubber (SBR), which will be profiled and analyzed separately.
Chapter 4 offers a useful directory of producers within the US ethylene value chain. The profiles are clearly arranged according to contact details, sales, profit, product range, production sites, and summary profile.
Each profile also includes specific information about the value chain as well as current and future production capacities for ethylene and derivatives. Extensive profiles are given for the largest 48 manufacturers, including Chevron Phillips Chemical Company, Exxon Mobil, LyondellBasell Industries, Huntsman International, The Dow Chemical Company, Occidental Petroleum, Formosa Plastics, Royal Dutch Shell, Total, Westlake Chemical and Styrolution.