GLG News by Natural Rubber Experts

The shuttering of Lyondell's and Westlake's ethylene facilities brings operable capacity to about 70% of nameplate, and utilization rates below 65%. By closing Chocolate Bayou, Lyondell most likely, stands to improve their net cash flow.

Sunoco Chemicals is the largest US producer of phenol and a significant producer of polypropylene.  These are very large businesses in the trough of a downturn.  Which companies might have the foresight to entertain this kind of acquisition?

Polymer prices are beginning to fall in Europe with supply on its way from the Middle East.  However, it is the weak demand driving down prices, not the cheap supply from new Middle Eastern plants.

Private investment firms have supported dynamic growth in the chemical industry.

Ethylene producers have returned to profitability.  While ethylene prices are dropping quickly, feedstock prices are dropping faster.  While heavy feedstock cracking may still be negative, the overall industry (median margins) are back in positive territory.  Derivative margins are quite...

Japanese ethylene producers are beginning to reduce operating rates to adjust to market conditions.  Because of their relative high costs in Asia, Japanese producers are the marginal suppliers.  As they reduce production, we see the deepening of the trough hit Asia.

The hopeless housing market puts US PVC makers in a very poor position.  Global PVC capacity is up, and prices and margins are falling.  New capacity will toughen the market conditions on a global basis.  In the meantime, falling chlorine consumption is sending caustic prices higher.

Dow seeks to lead the industry to try to recover the increase in energy costs.  An across the board increase makes sense if energy costs have equal effect on manufacturing costs.  The move certainly gives them another opportunity to raise the awareness of energy prices on chemical produce...

First quarter results from converters confirm that demand for plastics packaging materials is down.  The good news is that higher revenues are attributed to thier ability to increase prices.  If converters have pricing power in the market, this should be good news for resin producers.

Energy costs are the most important input to chlor-alkali production costs.  Companies who have advantaged energy contracts, like those with low cost hydroelectric power, have a significant cost advantage in the market.  If Ineos can secure discounted electricity supplied to their operations...