Home

U.S. petrochem profits to peak in 2002?

Sept. 2, 1996

U.S. Petrochemical Industry Profitability [25878 bytes] After weakening the next few years, U.S. petrochemical prices and margins will begin recovering in 2000 and peak in 2002. That in turn presages continued volatility in U.S. petrochemical profits to 2010 (Chart). This is the prediction of Chem Systems Inc. (CSI), Tarrytown, N.Y. "Historically, cyclical behavior has been evident in the petrochemical industry and is likely to continue," the analyst said. CSI predicts ethylene prices will

U.S. Petrochemical Industry Profitability [25878 bytes]

After weakening the next few years, U.S. petrochemical prices and margins will begin recovering in 2000 and peak in 2002.

That in turn presages continued volatility in U.S. petrochemical profits to 2010 (Chart).

This is the prediction of Chem Systems Inc. (CSI), Tarrytown, N.Y.

"Historically, cyclical behavior has been evident in the petrochemical industry and is likely to continue," the analyst said.

CSI predicts ethylene prices will crest at 29.4¢/lb and propylene at 23.9¢/lb (all prices are in constant 1995 dollars).

During 1996-2010, cash margins for the most profitable ethylene plants are expected to average 8-9¢/lb for an average product price of 18-19¢/lb. Margins during the 2001-2002 peak will average 13-15¢/lb, while prices average 21-25¢/lb, says CSI. Similar levels are expected during a second peak in 2008-2009.

Margins for recovery of polymer-grade propylene from refineries will average 2.5¢/lb for 1996-2010, while prices average 16¢/lb. During the peak periods, margins will be 10¢/lb and prices 24¢/lb.

During 1996-2010, the price of benzene will average 96¢/gal, 8¢/gal more than toluene, says CSI.