COMMENT
One swallow doesn't make a summer
Andrew Liveris, CEO of the globally operating US plastic giant Dow, has just announced the construction of a new PE production line in Europe. It is definitely good news for the plastics processing industry, which has not exactly been spoiled in this respect in recent times, but it certainly comes as a big surprise. After all, the subject of consolidation was only on the agenda recently, and now a stubborn industry protagonist of "America First" wants to expand in Europe of all places? It may seem like an upside-down world, but there is of course a certain economic logic to the project.

Dow says it wants to "maximise the value of the ethylene integration" of the company in Europe. Overall, the group has a surplus on the continent of around 1m t/y of ethylene. At its large Dutch site in Terneuzen alone, Dow has ethylene capacities of more than 1.8m t/y, but can utilise only around 1m t/y of this for PE. That makes it one of the traditional C2 net sellers in the northwest European ARG pipeline system.

Evidently, however, there is currently a certain amount of shifting about taking place behind the scenes on the ethylene market. The start of US ethane deliveries to Europe is enabling full restoration of the cracker capacity in Grangemouth / Scotland, and is even fuelling thoughts of expansion in Norway. This is threatening to upset the market balance that has been in place for many years now. As a result, Dow could well end up sitting on its surplus in Terneuzen, because closure of one of the three crackers there could prove difficult due to its integration in the site network. The question is then: What other alternative exists apart from simply flaring it, as they used to do in former times?

Dow has not said which site will be chosen for the new PE line. It would be very surprising if it were not Terneuzen. Europe has already experienced a constellation of this kind with the recent construction of a large PE facility at the Wilton / UK, which opened in 2010.

This announcement does not, however, hail a general turnaround for the threatened production of plastics in Europe. Unfortunately, one swallow does not make a summer.

Daniel Stricker
PIE Head of Market Research
19.05.2017 Plasteurope.com [236957-0]
Published on 19.05.2017
© 2001-2017 Plasteurope.com

Plasteurope.com is a business information platform for the European plastics industry. It is part of KI Kunststoff Information and PIE Plastics Information Europe, one of the leading content providers for the European plastics industry. We offer daily updated business news and reports, in-depth market analysis, polymer prices and other services for the international plastics industry, including a suppliers guide, career opportunities, a trade name directory and videos.

News | Polymer Prices | Material Databases | Plastics Exchange | Suppliers Guide | Jobs | Trade Names | Videos | Associations & Institutions | Register | Advertising

PIE – Plastics Information Europe | KI – Kunststoff Information | KunststoffWeb | Plastics Material Exchange | Polyglobe | K-Profi
© 2001-2017 by Plasteurope.com, Bad Homburg
Date of print: 21.11.2017 18:36:58   (Ref: 547404857)
Text and images are subject to copyright and other laws for protection of intellectual property.
Any duplication or distribution in any media as a whole or in parts requires prior written approval by Plasteurope. URL: http://www.plasteurope.com/news/detail.asp