Mr. Kevin Boyle

GLG News by Mr. Kevin Boyle, Consultant

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

Ethane looks even better for petrochemicals in the long run

November 4, 2011

Analysis of:Another Oil Shock? | www.mckinseyquarterly.com

McKinsey poses a scenario where crude oil rises to $125 to $175 per barrel, forcing fundamental structural changes.  One of those changes is reduced consumption of oil in petrochemical production.  This is more good news for additional ethane-based petrochemical capacity.

The Startup That's Working On a Real Petrochemical Game-Changer

October 5, 2011

Analysis of:Ethylene Production Technology | www.technologyreview.com

A startup called Siluria has developed catalysts that can convert methane (natural gas) directly and selectively to ethylene. The technology is said to be a vast improvement over the existing MTO (methane to olefins) technology, which is expensive and not very selective. If economically viable, this technology would have a significant impact on both the ethylene industry and stranded gas.

New Wave of Ethylene Crackers -- This Won’t Happen

July 7, 2011

Analysis of:POLL FINDINGS: Industry forecasts wave of new North America crackers by 2020 | www.hydrocarbonprocessing.com

Hydrocarbon Processing conducted a poll with results finding that 77% of respondents think four or more new ethylene crackers will be built by 2020. An amazing 31% think eight or more will be built. This won’t happen!

Demand Destruction of Butadiene

June 29, 2011

Analysis of:Asia tyre makers may opt to switch to NR on spiking BR prices | www.icis.com

The reduction in SBR in tire formulations probably represents real demand destruction for butadiene as the minimization has been in place for years. The reduction in butyl rubber could represent further real demand destruction for butadiene. However, this is still flexible, depending on prices. It is not easy to add supply of natural rubber as you have to wait for a tree to grow. Therefore, the give/take of butyl rubber versus natural rubber may go on for some time.

Butadiene Continues to be Too Tight

June 15, 2011

Analysis of:US Goodyear declares force majeure on SBR | www.icis.com

The butadiene problem is endemic in the U.S. Crude C4 is produced as a coproduct of ethylene when heavier feedstocks are cracked. The easy availability of relatively cheap ethane, enhanced by the new shale gas has driven feedstock slates to ethane, producing very little crude C4 for processing into butadiene.

Ethane from Marcellus—At What Price

June 7, 2011

Analysis of:Shell Plans to Build Ethylene Cracker in Marcellus Region | www.industryweek.com

The pricing of ethane from the Marcellus Shale Play will be a complex mix of interests. Gas producers will welcome the offtake of ethane, but need frac spreads that meet commercial thresholds as a whole. However, to justify the $1-1.5 billion investment in an ethylene cracker, secure supply of ethane and advantaged prices will be necessary. Otherwise, ethylene producers would undertake less capital intensive expansions at U.S. Gulf Coast facilities.

Implications on Petrochemicals of Iran's Gasoline Supply

September 21, 2010

Analysis of:Iran sharply cuts petchem exports, reconsiders gasoline imports | www.zawya.com

Iran switched its petrochemical facilities over to produce gasoline. With operating rates in the Middle East hovering quite low, this might sound like good news. At best, the scheme just adds uncertainty to petrochemical markets.

Weakening Asian Polyethylene Demand Backs Up into the US

March 22, 2010

Analysis of:Excess stocks in China weighing down sentiment in global PE markets | news.alibaba.com

Chinese traders are re-exporting imported polyethylene to pull down inventories and adjust to weaker demand. This has pulled down prices in Asian and may hinder US exports to the region.

Sunoco Polypropylene Good Deal for Braskem

February 1, 2010

Analysis of:Sunoco Announces Agreement To Sell Polypropylene Business | www.thestreet.com

Braskem hits the polypropylene market as demand and prices are rising. The price of $350 million is just about half of replacement cost.

Braskem is Coming North

January 26, 2010

Analysis of:Quattor acquisition does not alter US plans, says Braskem CEO | www.bnamericas.com

Braskem is now the largest polyethylene producer in the Americas. They have aggressive expansion plans that include purchasing US assets and new facilities in other Latin American countries.

Good news for PET

January 25, 2010

Analysis of:Coke's New Bottle Is Part Plant | online.wsj.com

Coke's new plant-based PET still requires the production of the plastic. So here's an environmentally responsible measure that does not hurt PET.

More Ethylene Expansions in the Middle East – “A Seat at the Table”

January 7, 2010

Analysis of:Exxon signs petchem plant deal with Qatar | www.reuters.com

Now that it seems the glut of ethylene capacity coming on in the Middle East and China will fit nicely into growing markets, more expansions are being announced. We have seen this during every cycle in petrochemical markets – there are many preemptive capacity announcements. Not all of them will be built.

Caustic Soda in Asia – Classic Problem

January 4, 2010

Analysis of:OUTLOOK ‘10: Asia caustic soda sees greater price flexibility | www.icis.com

Uncertainty about basic markets affecting caustic soda in Asia, namely the Australian alumina market and PVC markets, have buyers trying to shift to more flexible contract terms for caustic soda from traditional six month fixed price contracts. A flat price versus a variable price is a classic hedging problem. Asian buyers and sellers now might have a hedging tool to address this problem.

What happens with ethylene capacity after 2012

December 7, 2009

Analysis of:Saudi poised to become global petrochem hub | www.tradearabia.com

Petrochemical growth in the Middle East over the next few years will be "substantial," to say the least. But where do petrochemicals go from there. While Middle Eastern source promise more growth in capacity through 2015, there are three reasons to wonder: First, where will the money come from; second, is there cheaper capacity that might be available; and, third, just what is the region's continuing competitive advantage in petrochemicals?

Sabic’s Dismal Q2 Results Unlikely Representative of the Petrochemical Industry

July 20, 2009

Analysis of:UPDATE 1-Saudi Basic Industries' Q2 profit plummets on crisis | www.iii.co.uk

Sabic buys feedstocks at a low, fixed price, so falling prices mean falling EBITDA.Market conditions for Sabic in Q2 of 2008 were different that for other non-Middle Eastern producers.

After Dow’s Petrochemical Plant Closures – More Yet to Come

July 5, 2009

Analysis of:Dow Chemical to Shut Three Louisiana Ethylene Plants (Update3) | www.bloomberg.com

This plant closure will have no immediate impact on the ethylene market.  There may be additional rationalization coming in petrochemicals.  What may close in the future is a big gamble.

PVC Futures Contracts – A Very Tough Hedge

May 18, 2009

Analysis of:Shanghai Chlor-Alkali to Run PVC Futures Hedging Business | www.tradingmarkets.com

The economics of PVC have always been complicated; much more complicated than polyolefins.  Several years ago as China undertook a rapid expansion in the PVC capacity, they introduced a very old concept which has further complicated the market.

Petrochemicals : Japan Out, Japan In, Venezuela Tries Again

April 14, 2009

Analysis of:Chavez Says Japan to Spend $33.5 Billion in Venezuela (Update3) | www.bloomberg.com

Venezuela has the potential to build ethylene operations that would rival Middle Eastern plants.  Japanese companies actively supporting and participating in Venezuela's ambitious plans.

Can India take on the Global Petrochemical Industry?

April 7, 2009

Analysis of:India sets out plans for rapid petrochemicals growth | www.yourindustrynews.com

India plans large increases in petrochemicals making it long ethylene. Can Indian petrochemical capacity compete with the Middle East?

Middle Eastern Petrochemical Companies have Incentives to Expand to Other Regions

March 24, 2009

Analysis of:Gulf petrochemicals industry has to make most of slump | www.meed.com

Sentiment in the Middle East is that these times are an opportunity for local petrochemical producers to become global players.

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