Key Themes – November 2017

As we rapidly approach the end of 2017, we wanted to share with you some of the key themes that everybody in the industry, and particularly those involved with polyolefins, should be looking at. In this edition, we cover the rising prices of natural gas liquids and how those increases are impacting the ethylene and propylene value chains. We also cover the spread between olefin prices across regions, and how those differences are helping improve heavy cracking economics around the world. Finally, we discuss the impressive margins, both integrated and non-integrated, that polyolefins are enjoying these days. We review the shift in margins in the value chain from olefins to polyolefins, and how that change, together with rising feedstock prices, is impacting the outlook for once-promising on-purpose propylene production technologies like PDH around the world.

The analysis was created in preparation for the 37th Latin American Petrochemical Industry Association (APLA) meeting, which was just held in Rio de Janeiro. The mood in the meeting was positive, with demand recovering after two very difficult years and excellent margins being the norm for most producers.

The main questions, repeated in different ways by meeting participants, were about logistics out of North America and the impact that the new polyethylene projects in the U.S. will have in the region. Is the infrastructure ready for the new projects that are ramping up? What would be the impact of the newly available materials in the industry? What’s the cost to move material into the region? What are the capabilities to move product out of North America for everything from NGLs to olefins and polymers?  ChemPMC will monitor these and other related issues, in future editions of the Key Themes report.

During the APLA meeting’s opening cocktail, we had an opportunity to hear the legends Toquinho and Maria Creuza sing Toni Jobim’s famous song “A Felicidade”. As the song says, “Tristeza nao tem fim, felicidade sim” (sadness has no end, happiness does). As a very positive 2017 winds down and a new 2018 starts, one can only hope that the song is not a forecast for what the new year has in store for the industry…

You can download a copy of the report here. If you have any questions or comments about it, do not hesitate to contact us at


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