Most petrochemical business insiders would expect ethane to be the most economical ethylene plant feedstock right now with the oil-to-gas ratio currently at a relatively healthy 25 to 1. But ethane feedstock margins are currently about 5 c/lb lower than normal butane and 1 c/lb below propane cracking economics. As shown on the chart below, ethane cracking margins have declined from ~19 c/lb in late March to 7 c/lb as of June 26. Economics for normal butane cracking have held up much better with a margin of about 13 c/lb while propane margins currently sit at ~8 c/lb.
Featured Articles
- Analyst Insight
U.S. LPG Steam Cracker Feedstock Margins Plunge
Feedstock margins for LPG cracking (propane and normal butane) have sunk deeper into negative territory to start the new year approaching natural gasoline as the least economical cracker feedstock.
- Blog
Return to the Ethane Asylum - Price Skyrockets as Supply/Demand Uncertainty Looms for the Lightest NGL
That crazy little ethane molecule is at it again. Yesterday the price blasted to 67.875 c/gal, a level last seen on January 17, 2012. Petchem cracker margins are low. Production is up, but inventories are down. A big driver of the bedlam is the price of natural gas, trading in the $7-$9/MMBtu range for the past month. But as usual with ethane, there’s a lot more happening below the surface — including high domestic demand, growing export volumes, and significant developments in downstream petrochemical markets — all shaking things up. Looking ahead, uncertainty looms, with more export capacity, ever-changing ethane rejection economics, and uneven production growth. In today’s RBN blog, we’ll leap back into the ethane market to see what’s been going on, and where ethane is headed over the next few years.
- Analyst Insight
Normal Butane Steam Cracker Margins Soar
U.S. steam cracker margins for normal butane feedstock have soared over the past month moving from the least economical to most economical feedstock. Butane cracking margins have increased from a negative 12 c/lb in late February to 21 c/lb as of March 27. Ethane and propane steam cracker margins have improved by only about 5 c/lb over the same period, well below the 33 c/lb increase in the butane margin.
