MOSCOW (MRC) -- US ethylene exports have declined and shifted from Asia to Europe as US producers focus on restocking inventories in the aftermath of a deep freeze that hit the US Gulf Coast in mid-February and subsequent operational issues that squeezed output, reported S&P Global with reference toNavigator Gas CEO Henry Deans' statement Aug. 17.
"Although production rates have increased, they have not risen as quickly as predicted and have therefore taken some time to replenish the ethylene pipeline," he said during the company's Q2 2021 earnings call.
"This, coupled with production hiccups, patchy cracker reliability and strong domestic demand and pricing has favored just domestic supply over exports, which had an all-on impact on our shipping business," Deans said.
Navigator is a 50% partner in Enterprise Products Partners' 1 million mt/year ethylene export terminal on the Houston Ship Channel.
The freeze brought sustained subfreezing temperatures to the US Gulf Coast and much of the US in mid-February, forcing more than 70% of 40 million mt/year of US ethylene capacity offline for several weeks.
Subsequent production headwinds continued into Q3 2021, Deans said, "and currently show no signs of abating."
He said US ethylene inventories remain at five-year lows amid hurricane season, and producers remain focused on building inventory. August and September tend to be the months during the June-November US Atlantic hurricane season when major storms are most likely to develop and hit the US Gulf Coast.
As MRC informed previously, Enterprise Product Partners' PDH unit in Mont Belvieu was taken off-line for a turnaround in early February. Thus, the PDH unit was shut for scheduled maintenance on Feb. 1 for approximately six weeks. This PDH unit has the capacity of 750,000 mt/y of propylene.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC