As Naphtha prices continue to soar, the Global Petrochemical Industries ponder upon alternatives
Petrochemical industries are forced to reduce their operating rates or switch to other fuels due to the skyrocketing prices of naphtha owing to highly volatile trend of upstream crude oil which is worsened by the ongoing Russia-Ukraine war. Naphtha-fed steam crackers have reduced their productions in Asia since last quarter of 2021 and most of their production have reduced to 70%, since the turmoil caused by the current geopolitical situation doesn’t seem to resolve soon, so it will likely led to production cuts further downstream. Since the main feedstock in petrochemical crackers in the US is ethane which is derived from Natural gas unlike Europe and Asia where the industries rely on Naphtha derived from Crude oil, so the downstream products like polyethylene (PE) and polypropylene (PP) in the US didn’t have to reduce production from soaring crude oil price. But in the Asian market it was quite the opposite, PP and PE producers in north Asia have planned to shut down for couple of m...