Weekly Thematic

US Ethylene; Yikes! Some Surprising Losses Ahead
May 5, 2020
Companies Mentioned:
Dow, Westlake, Celanese, Nova, Sasol, Shell, LyondellBasell, ExxonMobil CP Chem, Ineos, Borealis, SABIC, Formosa, Shin-Etsu, DuPont, Eastman, PPG
Commodities Mentioned:
Subjects Covered:
Margin Compression, Refining, Operating Rates

C-MACC Perspectives No 12

US Ethylene; Yikes! Some Surprising Losses Ahead

  • When we published our ethylene price forecast last week, we indicated that we were concerned that the “low” scenario might play out near-term. It looks like we could be wrong – it could be worse than that!
  • The forward curves for natural gas (which are likely wrong) suggest higher pricing for US ethane (which may be right) – already evident in the recent price moves for ethane, putting further competitive pressure on US ethylene producers.
  • The likelihood that we see dramatic cutbacks in US ethylene operating rates during the second quarter is increasing daily. As naphtha and ethylene prices weaken in Europe and Asia (together with demand) there is nowhere to send US exports – estimates are too high.

See PDF below for all Charts and the rest of the report

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