Light olefins
Overview
The global light olefins market is made up of ethylene and propylene monomers. These product markets can be affected by a great many factors.
Ethylene is the most widely used commodity chemical and is produced globally in all major regions. It is converted into many products used in daily life like plastic packaging, durable goods, hygiene products and other consumer items. The ethylene market is driven primarily by regions of low production cost and regions of high demand growth. Polyethylene, ethylene’s largest derivative, represents about 65pc of global ethylene demand. Anyone involved in the ethylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Propylene is the second most widely used commodity chemical and is produced globally in all major regions. Propylene is a volatile commodity because of its predominantly co-product nature and unpredictable supply, but recently the industry has been trending to more on-purpose production. It is converted into many products used in daily life like plastic packaging, durable goods, automotive products, and woven fabrics. Polypropylene, propylene ’s largest derivative, represents about 70pc of global propylene demand. Anyone involved in the propylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Our light olefins experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global market.
Latest light olefins news
Browse the latest market moving news on the global light olefins industry.
US construction spending flat, PVC demand falls in Nov
US construction spending flat, PVC demand falls in Nov
Houston, 2 January (Argus) — US construction spending was virtually flat in November compared with the previous month as private and public spending offset one another, according to the US Census Bureau. US polyvinyl chloride (PVC) contract prices declined by 1¢/lb in November to 57.5¢/lb, according to Argus . Producers faced pressure during the month as the softening US construction sector failed to absorb recent PVC capacity additions that had come on line. Formosa added an additional 130,000 metric tonnes (t) of PVC capacity to its Baton Rouge, Louisiana, plant in the mid-third quarter. Shintech added 380,000t/yr of nameplate PVC capacity to its Plaquemine, Louisiana, plant in the fourth quarter. PVC buyers increasingly focused on inventory management in November, further constraining demand. Many buyers and converters wished to avoid being oversupplied as the end of the year approached due to modest demand growth expectations for 2025. Private residential spending grew for the second month in a row after a sharp decline in September, but recovery slowed in November. Public spending fell for the second-straight month, offsetting minimal gains in private spending. Public spending was virtually flat or slightly down from the prior month in various major categories. Private manufacturing investment was above 10pc year over year, but sustained monthly growth has stalled. A small boost in commercial spending does not reverse year-over-year decline. By Aaron May US Construction Spending $mn Column header left 24-Nov 24-Oct +/-% 23-Nov +/-% Total Spending 2,152,581.0 2,152,250.0 0.0 2,090,690.0 3.0 Total Private 1,650,665.0 1,649,758.0 0.1 1,610,750.0 2.5 Private Residential 906,201.0 905,149.0 0.1 879,069.0 3.1 Private Manufacturing 234,917.0 235,231.0 -0.1 211,541.0 11.1 Private Commercial 118,206.0 118,127.0 0.1 130,707.0 -9.6 Total Public 501,916.0 502,491.0 -0.1 479,940.0 4.6 Public Water/Sewage 79,018.0 79,207.0 -0.2 71,683.0 10.2 Public Highway/Road 142,908.0 142,682.0 0.2 148,143.0 -3.5 US Census Bureau Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.
Viewpoint: Braskem eyes Brazil rebound
Viewpoint: Braskem eyes Brazil rebound
Sao Paulo, 30 December (Argus) — Major petrochemical producer Braskem aims to recover market share in Brazil in 2025, aided by higher tariffs and new duties on imports, after nearly two years of losses. Braskem posted $935mn of losses last year, with additional losses of $440mn spread across the first three quarters of 2024. Looking ahead to 2025, Braskem expects to increase its domestic share of polyethylene (PE) and polypropylene (PP) markets in Brazil, in part through higher import tariffs. Brazil raised tariffs on imported polymers to 20pc from 12.6pc effective on 15 October. That has already benefited the company, with sales in the fourth quarter expected to increase by $30mn from the previous quarter, Braskem said in November. Additionally, with fewer imports, Braskem's operating rates for plastic resins are expected to rise in the first quarter from around 64pc during the seasonally weak fourth quarter. In addition to the higher tariffs, Braskem is asking Brazil to apply anti-dumping duties on US- and Canada-produced PE. This could reduce the amount of this material coming into Brazil, which has surged in recent years. The case is being investigated. Braskem has requested duties on PE imports of 21.4pc from the US and 26.9pc from Canada. This would mean a 20pc import tax, plus a 21.4pc provisional dumping duty, totaling a 41.4pc tax on materials purchased from the US, and 46.9pc on Canadian PE. To put the numbers in perspective, Brazil imported 1.82mn metric tonnes (t) of PE in January-November, a 45pc increase from the same period a year before. Of the total figure, 77pc was bought from the US and Canada. Brazil's PE imports in November alone fell to 106,200t, 39pc lower than October and the lowest this year, showing the initial impact of the higher import duties. Still, November PE imports were up by 6pc from the same month in 2023 despite the 20pc import duty as well as the US dollar's appreciation to the Brazilian real since October. The Argentina case Braskem has looked to neighboring Argentina to recapture part of the sales lost to imports in Brazil during the year. Braskem's PE sales to Argentina have increased monthly through October, when the company became the largest PE exporter to Argentina. Argentina PE imports in October increased by 39pc from the same month in 2023, reaching 24,300t, a boost attributed to the reduction in the country's import duty to 7.5pc from 12.6pc in September. Brazil sold 46pc of that total, leading the market. North America lost its first position, falling to 42pc in October from 54pc a year earlier. January-October PE imports into Argentina fell to 226,800t, down by 19pc from the same period in 2023, with North America's share at 44pc and South America — represented solely by Braskem — at 39pc. Executive reshuffle As part of its efforts to become more competitive, Braskem reshuffled its executive board, aiming to improve operational efficiency and cost management. The company's new chief executive, Roberto Ramos, stepped into his role in early December, succeeding Roberto Bischoff. Ramos previously served as Braskem's vice president from 2002-2010. Ramos almost immediately announced changes for the positions of chief financial officer, head of the olefins and polyolefins South America unit, Brazil and global industrial operations, and Mexico and US operations. At the time, Braskem said that changes in the board would not affect plans for a possible sale of infrastructure company Novonor's controlling share in Braskem, Novonor said. Braskem's sale is of extreme importance to Novonor as it plans to use any proceeds to repay R14bn ($2.34bn) in debt to creditors. Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. Fellow conglomerate Novonor holds a 38.3pc stake in Braskem with 50.1pc of voting shares, while Brazilian state-controlled oil company Petrobras holds a 36.1pc share with 47pc of voting capital. The remaining 25.6pc is split among other shareholders. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
SP Chemical commissions new PVC unit in China
SP Chemical commissions new PVC unit in China
Shanghai, 30 December (Argus) — SP Chemical (Taixing), a private company wholly owned by Singaporean firm SP Chemical, has started commercial runs at a 250,000 t/yr polyvinyl chloride (PVC) unit in China. This came after a successful trial run at the unit in Taixing county, Jiangsu province on 27 December. Current operating rates at the producer's new PVC plant were at 40-50pc. SP Chemical originally planned to start up two new PVC units at the end of this year, each with a 250,000 t/yr output, fed with its own existing 900,000 t/yr vinyl chloride monomer capacity. Construction of both PVC units were completed in mid-November, but another 250,000 t/yr PVC unit at the same site has yet to start operating because of sluggish PVC demand and squeezed margins. The weekly suspension ethylene-based PVC pipe ex-works China price was at 5,090-5,700 yuan/t or an import parity of $562-632/t on 29 December, down by Yn400-660/t or $64-93/t compared with a year earlier. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Viewpoint: PVC expansions loom over US market in 2025
Viewpoint: PVC expansions loom over US market in 2025
Houston, 27 December (Argus) — US polyvinyl chloride (PVC) market participants expect some domestic demand growth in 2025, but recent expansions could limit price increases in both the domestic and export markets. Most producers are optimistic PVC demand will grow at a strong rate in 2025, with some expecting growth above 5pc. But producers also caution that greater volume sales may not translate into higher prices because of additional capacity brought on line in the second half of 2024. Formosa added 130,000 metric tonnes (t) of PVC capacity to its Baton Rouge, Louisiana, plant in the third quarter, and Shintech added 380,000t/yr of PVC capacity to its Plaquemine, Louisiana, plant in the fourth quarter. Producers' concerns that higher sales volume would not translate into higher prices have proven true so far. Domestic PVC sales have grown as much as 8pc in the year through November, according to producers, but PVC contract prices in November were unchanged from January at 57.5¢/lb after some fluctuations during the year. Prices fell by 2¢/lb in the months following Formosa's expansion. Contracts for December, which will represent the month following Shintech's expansion, have not yet settled. Buyers have more muted expectations than producers for demand in 2025, further adding to the modest price outlook for the coming year. This is partly because many buyers believe interest rates that recently began to fall will take time to stimulate housing construction, potentially delaying a rise in PVC demand until late 2025 or even 2026. Lower interest rates can reduce homebuilders' borrowing costs and ease mortgage rates for prospective homebuyers. The cautious outlook was already pervasive among PVC buyers and converters before the US Federal Reserve in December reduced its forecast for 2025 interest rate cuts to half a percentage point, down from a full point in the September projections. Reliance on exports US producers may need to rely on exports to absorb the new capacity, a trend that has kept export prices low since August. US PVC export spot prices were at $700/t fas on average in late September after Formosa ramped up its capacity expansion, compared to an average of $750/t fas a year earlier. After Shintech's expansion, export prices fell to $673/t fas on average by late-December, compared to $695/t fas on average during the same time in 2023. While spot export prices initially had a floor of $670/t fas after both expansions, the global environment has become even more competitive at year-end with some overseas producers struggling to move volume, according to traders. A greater reliance on exports at a time when several countries recently implemented anti-dumping duties on US material could make for a difficult market in 2025, with pricing needing to come down to start the year if there is too much volume on hand, traders said. India recently announced preliminary anti-dumping duties on US PVC from 80-150pc, with duties exceeding $300/t for some US producers. Brazil in October raised import taxes on PVC from 12.6pc to 20pc. The European Commission last month confirmed duties on US-origin PVC between 58-71.2pc, and the UK is considering duties from 38.4-56pc. The Indian duties in particular could pose a challenge to US exporters because US producers and traders had become reliant on Indian customers as an outlet for US supply. India is one of the few countries for US exports with steady demand growth. Should US exporters lose market share in India, there are no immediate alternatives to offset that loss. By Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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