ERJ staff report (PR)
Constance, Germany – The impact of the shale gas boom in the US on ethylene pricing is set to continue to the end of the decade, ensuring low costs for this feedstock for olefinic polymers including EPDM and styrene-butadiene rubbers, researcher firm Ceresana has forecast.
Average feedstock costs per tonne of ethylene manufactured fell by about 40% between 2008 and 2013. And, with US shale gas fuelling an unprecedented surge in projects to construct new ethane crackers, Ceresana forecasts this will continue
Until 2018, US ethylene capacity is scheduled to increase by about half, said Ceresana, adding that around three quarters of ethylene output is likely to be based on ethane in 2021.
Compared to the other main feedstocks – propane, butane, and naphtha – cracking of ethane yields a high amount of ethylene, leading to significant competitive advantage.
In the fourth quarter of 2013, cash costs – 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, Ceresana estimates.
Ceresana is an international market research and consultancy company, with branch offices in Constance, Vienna and Hong Kong.