Future of Polyolefin
WhenJan 30, 2013 08:00 AM to
Jan 31, 2013 05:00 PM
Naphtha will remain the major feedstock of olefin production accounting for more than 50%. However, the cost advantage of ethane and shale gas as feedstock is significantly increasing as a result of the new investments in the Middle East and North America.
Consequently, the profit margin opportunities for naphtha based crackers are shrinking due to the low-cost polyolefin commodity products of gas-based crackers.
Thus, the importance of alternative margin generation sources is inevitable for liquid crackers to maintain the level of profit for shareholders.
Taking into consideration the above industrial tendencies there are three possible strategic options envisioned for naphtha-based crackers.
- Reduce olefin production costs with advanced technologies
- Switch to specialised products either alongside or in place of polyolefins
- Increase the share of by-products and sales (e.g.. Crude C4, butadiene, butadiene derivatives, propylene, propylene derivatives) as ethane crackers produce less by-products than naphtha crackers