MOSCOW (MRC) -- Navigator Holdings (London, UK) says US ethylene exports are back on the rise, driven by recovering Asian demand and a continuing arbitrage, according to Chemweek.
The company shared its assessment in preliminary second-quarter financial results released on 13 August.
Ethylene shipments slowed late in the first quarter as COVID-19 lockdowns and the related global economic downturn weighed on demand, says Navigator. “However, as Asian economies restarted during the latter half of the second quarter, so too did the demand for ethylene. An upsurge in US ethylene export capacity from our([Morgan’s Point) marine export terminal, drove an uptake in cargo liftings from the second half of May onwards, positively impacting handysize ethylene tonnage.”
The Morgan’s Point terminal, located near Houston, Texas, is a 50/50 joint venture with Enterprise Products Partners. The terminal loaded more than 80,000 metric tons of ethylene in June, including a 20,000-metric-ton parcel loaded onto the Navigator Eclipse, marking the largest ethylene parcel ever carried on a gas carrier, says Navigator. A new 30,000 ton storage tank will increase the terminal’s throughput capacity by the end of 2020.
Marine exports of ethylene from the US totaled around 100,000 metric tons in June, according to Navigator. “July and August also kept pace as the ethylene price arbitrage remained open, with charter rates and vessel utilization across the ethylene shipping fleet having improved markedly in the latter part of the second quarter,” says the company.
Navigator says its share of the Morgan’s Point terminal yielded a loss during the second quarter, but it was profitable June, owing to the start of long-term take-or-pay contracts, and the company expects it to remain profitable for the rest of 2020. The offtake agreements, which have minimum terms of five years, account for approximately 95% of the terminal’s nameplate throughput capacity of 1 million tons/year.
As MRC wrote before, Enterprise Products Partners (Houston, Texas) co-loaded olefins and natural gas liquids (NGLs) twice in July, the first time such cargoes have been loaded for export from the US. A VLGC (very large gas carrier) received propane and polymer-grade propylene (PGP) simultaneously into separate compartments at the Enterprise Houston Ship Channel terminal. Another vessel took on ethane and ethylene simultaneously at the company’s Morgan’s Point facility in Houston.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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