Source: Petral Consulting Co.
*Cracker production from fresh feed.
US ETHYLENE PRODUCTION*
Jan. Apr. July Oct. Jan. Apr.
Light feeds Heavy feeds Capacity
Source: PetroChem Wire, Petral market research
Jan. Apr. July Oct. Jan. Apr.
0.8 million lb/day, while first-quarter production from Louisiana plants
declined by 0.9 million lb/day. The
drop in production during first-quarter 2015 contributed to an increase
in Louisiana’s fundamental ethylene
shortfall and compounded problems
resulting from reduced pipeline capacity following Boardwalk Midstream’s
January 2015 shutdown of Evangeline
pipeline for additional repairs.
While Texas ethylene producers increased production by 4. 7 million lb/
day in second-quarter 2015, producers
in Louisiana boosted output by only
0.3 million lb/day and made no measurable impact on the supply shortfall.
Fig. 2 shows trends in ethylene production.
Spot prices for crude oil and feedstocks fell to their recent historic lows
in first-quarter 2015, but by second-quarter 2015, crude oil prices had
staged a bear-market correction.
Spot prices for West Texas Intermediate (WTI) were $57.84/bbl in second-quarter 2015, which was 19.1%
higher compared with the previous
quarter. Dated Brent increased by 14.8% from first-quarter
2015 to average $61.92/bbl during the second quarter. The
Organization of Petroleum Exporting Countries’ Reference
Basket for second-quarter 2015 averaged $59.90/bbl, an increase of 19.1% on the quarter.
Spot prices for unleaded regular gasoline and naphtha
tracked the rally in crude prices during second-quarter
2015, but NGL prices generally continued to weaken. Propane prices in Mont Belvieu in the second quarter declined
by 6¢/gal, or 11.5%, from first-quarter 2015. Spot prices
for non-TET normal butane declined by 8. 8¢/gal and were
12.8% less than in first-quarter 2015. Spot prices for purity
ethane were almost unchanged during second-quarter 2015
vs. the previous quarter. “TET” is short for “Texas Eastern
Transmission” and refers to petroleum products in Texas
Eastern storage at Mont Belvieu, Tex., now owned and operated by Lone Star NGL LLC, an operating unit of Energy
Transfer Partners. “Non-TET” refers to product at Mont Belvieu but in other owners’ facilities.
From first-quarter to second-quarter 2015, spot prices for
propylene declined by 16% (polymer-grade propylene) and
23% (refinery-grade propylene). Contract settlements for
polymer-grade propylene were 41. 7¢/lb in second-quarter
2015 vs. 49. 7¢/lb during the previous quarter. Spot prices for
refinery-grade propylene were 29. 9¢/lb in the second quarter vs. 38. 8¢/lb in the first quarter.
Contract settlements for purity butadiene were essentially unchanged during first-half 2015, averaging 31.0-31.5¢/
lb. As spot prices for motor gasoline increased and octane
values strengthened, spot prices for aromatics increased by
20-22% from first-quarter to second-quarter 2015.
Ethylene production costs based on purity-ethane feeds
were 10¢/lb in first-half 2015. Production costs based on
ethane for first-quarter 2015 were only 0.25¢/lb less than in
fourth-quarter 2014 but 5¢/lb less compared with the same
quarter a year earlier.
In first-quarter 2015, purity ethane provided a cost savings of 11¢/lb vs. natural gasoline, with those cost savings
rising to 20¢/lb during the second quarter. While production costs for ethane and propane were the same from February through April, purity ethane lost its cost advantage
ETHYLENE FEED SLATE DEMAND Table 2
Ethane Propane n-Butane gas oil
2015 ––––––––––––––––– 1,000 b/d –––––––––––––––––––
January 1,010.5 401.3 70. 8 151.4
February 1,033.7 371.1 67. 8 160.9
March 1,033.8 358.6 75. 1 164.3
April 1,063.3 327.6 75. 1 160.0
May 1,080.4 340.0 85. 2 154.6
June 1, 103. 5 398.2 83. 7 153.1
Source: Petral Monthly Ethylene Feedslate Survey