Natural Gas Impact on Resin
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The natural gas boom of the last few years has not only had an impact on the energy sector, but also on the petrochemicals industry. Cheap natural gas is rapidly replacing oil-based naphtha as a steam cracker feedstock for ethylene production. A side effect of this shift is that natural gas cracking results in negligible secondary products such as butadiene (a key input for ABS) and propylene (a key input for polypropylene) when compared to naphtha-based cracking. Over the next five years, significant on-purpose propylene capacity is expected to come on line due to the aforementioned material shortages and vast amounts of cheap propane in the US. Unfortunately, the same cannot currently be said for butadiene. This will lead to long term pricing pressure on ABS and a bias towards polypropylene and HDPE.
This paper outlines recent natural gas developments, the advantages and consequences of natural gas-based cracking, the impact on key resins and mitigation strategies. To download a complimentary copy, please click here.