US Polyethylene Export Report 2016-2020

  • ID: 3993754
  • Report
  • Region: United States
  • 59 Pages
  • FC Business Intelligence Ltd.
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Excess North American Polyethylene Production Available for Export Will Be 6-9 Billion Pounds Within the 2016-2020 Time Frame

FEATURED COMPANIES

  • Axiall/Lotte
  • Chevron Phillips
  • ExxonMobil
  • Oxichem/Mexichem
  • Sasol
  • Shin-Etsu
  • MORE
  • Trade Flows
  • US polyethylene production capacities and export volumes
  • Price Forecasting. Unique insight into the competitiveness of u.s. polyethylene exports:total export costs, terminal cost comparisons, feedstock trade-offs and U.S. export net backs.
  • Regression analysis and scenario modelling of LDPE and HDPE prices to 2025
  • Export Costs
  • Shipping, packaging and logistics costs for key export markets

The increased production of U.S. ethylene and the associated investment in new U.S. polyethylenecapacity will increase North American polyethylene production to over 54 billion pounds per year by 2020, up from 44 billion pounds as of the end of 2014. This increase assumes 75% of the announced polyethylene projects are actually built and commissioned by 2020. In addition, industry sources cite the potential addition of another 2 billion pounds of capacity over this time frame. The significant U.S. ethylene supply and U.S. ethylene feedstock cost advantages will increase U.S. polyethylene production beyond domestic demand and support export volumes over the period.

Excess North American polyethylene production available for export will be 6–9 billion pounds within the 2016–2020 time frame, assuming 75% of the announced polyethylene projects are actually built and commissioned by 2020.The logistics infrastructure to transport polyethylene internationally in containers is well established and investments to support significant increase in polyethylene container exports from the U.S. focus on shipping container, product packaging, and container loading capacity improvements.

International trade of polyethylene has nearly doubled from 26 million tons in 2001 to 50 million tons in 2014. Over the last five years, global trade volume has expanded on average by 5% per year but showed only a very marginal growth in 2014. Expansions in production capacity and cost competitiveness have established the Middle East as a leading polyethylene export region, with annual export volumes nearly four times more than the volume of the next highest exporting regions.

China is the largest polyethylene importer, receiving more than 10 million tons in 2014 equivalent to around 20% of all internationally traded polyethylene. India and Singapore are the two strongest growing import markets, increasing from nearly no imports ten years ago to 1.8 million tons and 1.4 million tons in 2014, respectively. As new U.S. polyethylene capacity comes on line in 2016 and beyond, the U.S. will become a significant net exporter of polyethylene and put pressure on the international polyethylene supply/demand balance.

The transport of polyethylene is accomplished via three standard modes: palletized 25-KG bags, super sacks, and dry bulk containers. This report standardizes the transport mode assessments on palletized 25 KG bags in 40 foot containers since all container ports, logistics services and customers are able to handle this mode. The containers are moved via existing infrastructure between ships, trains, and trucks as they transit between cargo origin and destination facilities. Through 2020, the primary U.S. polyethylene export destinations are projected to be Northwest Europe, Brazil, South Korea, and China.

The most economically viable U.S. ethane export market is Asia. U.S. ethane exports were projected to be economically favorable in all three crude oil price scenarios, with Asia having an overall positive spread to U.S. margins. The analysis conditions indicate an economic feasibility for building ethane crackers in Asia over the analysis time frame. However, the likely reality of Asian ethane crackers needs more scrutiny over a longer time frame to more fully assess the risk of using imported feedstock, changing oil prices, and overall market dynamics.

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FEATURED COMPANIES

  • Axiall/Lotte
  • Chevron Phillips
  • ExxonMobil
  • Oxichem/Mexichem
  • Sasol
  • Shin-Etsu
  • MORE

Executive Summary
U.S. Market
Industry and Market Overview
Export Logistics
U.S. Market Fundamentals
Price Forecast – Ethane, Ethylene, Polyethylene 
Reference Case Results
Low Oil Price Case
High Oil Price Case
Graphs
Polyethylene
Supply 
Demand 
Export Balance and Forecast
Export Logistics and Infrastructure
International Market Fundamentals
Export Costs 
Competitiveness of U.S. Exports 
Total Export Costs
U.S. Terminal and Throughput Cost Estimation for Ethane and Ethylene
Throughput Costs for Other Products at U.S. Ports
Throughput Cost Estimation for U.S. and International Ports
Ethylene Terminal Cost Comparisons 
Feedstock Trade-Offs
U.S. Export Economic Analysis
Conclusions
References 

List of Tables
Table 1 Product Yield by Feedstoc
Table 2 Ethane Export Contracts Announced To Date
Table 3 Announced U.S. Ethane Cracker Expansion
Table 4 Reference case monthly Ethane, Ethylene, LDPE and HDPE Pricing forecast 
Table 5 Reference case yearly Ethane, Ethylene, LDPE and HDPE Pricing forecast
Table 6 Low Oil Price Case Ethane, Ethylene, LDPE and HDPE Monthly Pricing Forecas. 
Table 7 Low Oil Price Ethane, Ethylene, LDPE and HDPE Yearly Forecas
Table 8 High Oil Price Case Monthly Ethane, Ethylene HDPE and LDPE Pricing Forecast .
Table 9 High Oil Price Case Ethane, Ethylene HDPE and LDPE Yearly Pricing Forecast  
Table 10 Polyethylene Plants Starting up 2015–
Table 11 U.S. Ethylene Export Marine Freight Costs 
Table 12 Largest Ethylene Importing Countries 2004, 2009,
Table 13 Container Freight Rates to Primary U.S. Polyethylene Export Destination 
Table 14 Cost Elements within Container Freight Rate 
Table 15 Polyethylene Packaging Costs 
Table 16 European Ethane Import Infrastructure Cost 
Table 17 Reference Case Margin 
Table 18 Low Case Margin
Table 19 High Case Margin

List of Figures
Figure 1 Steam Cracker Feedstock Sources
Figure 2 Steam Cracker Cost as a Function of Feedstock Weight
Figure 3 Ethane feedstock product yiel.
Figure 4 Naphtha Feedstock Product Yield
Figure 5 Ethane Price 18-Month Forecas . 
Figure 6 Ethane Price Ten-Year Forecast 
Figure 7 Ethylene Price Eighteen-Month Forecast 
Figure 8 Ethylene Price Ten-Year Forecast
Figure 9 High Density Polyethylene Price Eighteen-Month Forecast
Figure 10 High Density Polyethylene Price Ten-Year Forecast  
Figure 11 Low Density Polyethylene Price Eighteen-Month Forecast
Figure 12 Low Density Polyethylene Price Ten-Year Forecast  
Figure 13 Derivative Share of U.S. Ethylene Capacity
Figure 14 Gross Domestic Product Growth 2016–202 
Figure 15 U.S. Exports of Ethylene Polymers Growth Rate 2005–2014
Figure 16 U.S. Export of Ethylene Polymers to the American Continents 
Figure 17 U.S. Export of Ethylene Polymers to Europe and Asia
Figure 18 Ethylene Carrier Fleet 8,000–24,000 cb
Figure 19 Global Polyethylene Trade
Figure 20 Polymers of Ethylene, Net Exporting Regio 
Figure 21 Polymers of Ethylene Net Importing Regio 
Figure 22 Liquefaction and Throughput Cost Benchmarks for U.S. Ports  
Figure 23 Project Investment and Corresponding Throughput/USD/Ton Cos   
Figure 24 Margin Flow Proce 
Figure 25 Domestic Feedstock Margin Calculation
Figure 26 Imported Feedstock Margin Calculation
Figure 27 U.S. Reference Case Ethylene Export Margin Forecast By Feedstock 
Figure 28 U.S. High Case Ethylene Export Margin Forecast By Feedstock 
Figure 29 U.S. Low Case Ethylene Export Margin Forecast By Feedstock
Figure 30 Ethane margin breakdown by region

List of Appendices
Appendix 1 EIA National Average Natural Gas Composition Dat
Appendix 2 Ethane Forecast Based On Natural Gas Liquid & Crude Oil Production (August 2015-November 2016) 
Appendix 3 Annualized Production Of Ethane, Crude Oil, And Natural Gas Liquids (1000S Of Barrels) 1981–2014. 
Appendix 4 Crude Oil And Natural Gas Liquids Conversion From Quadrillion Btu To 1,000 Barrels/Year. 
Appendix 5 Report Estimation Methodology 

Tables
Table A Ethane production and estimates produced by the EIA and regression mode. 
Table B Regression parameters from daily dat
Table C Two-step methodology and assumption 
Table D Linear model parameter figures of merit for significance
Table E Regression Coefficient and MAE during Backward Stepwise Regression 

Figures
Figure A Actual (E) vs. Predicted Ethane (Ê) Production as a Function of Crude Oil and Natural Liquid Gas 
Figure B Ethane Forecast (August 2015-December 2016 
Figure C EIA WTI Oil Forecasts by Case
Figure D EIA Brent Oil Forecasts by Case
Figure E EIA Natural Gas HH Forecasts by Case
Figure F Ethylene Price in Europe (orange series) and Estimated Price Using Brent and Naphtha Prices in Europe

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  • Sasol
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