Cost Curve Service - Ethylene

Capital investments in ethylene production units in recent years have focused on Middle Eastern countries due to advantaged feedstock costs, or areas such as China with rapid demand growth. The current and planned development of numerous shale gas fields in the United States is forecast to supply extremely cost competitive feedstocks compared to most other regions, so global producers are again considering North America as an investment option because of the favorable feedstock position and the stable investment environment. 

Furthermore, the development of alternative ethylene technologies has been gaining momentum over the past several years. Some companies are focusing on coal as an alternative feedstock to petroleum (crude oil or natural gas) feedstocks due to the availability of cheap coal; while other use bio or renewable feedstocks (sugarcane, corn, etc.) to produce green end-use intermediates. While traditional feedstocks will still dominate the global production of ethylene, coal-based olefins are fast becoming a significant share of ethylene production in China. Bio-based ethylene derived from ethanol still comprises only a marginal share of ethylene production, but this segment is commanding price premiums for use in products (primarily bottles and packaging) to support retail brand owners’ market reputations.

The Cost Curve Service – Ethylene analyzes each of the world’s production facilities, building up cost based on the technology and feedstock slate, estimated feedstock cost and by-product credit value, utility consumption and other variable and plant fixed costs. Plant size, degree of integration and operating rates are all taken into account. 

The cost curve covers all of the key processes for producing ethylene, including

• Steam cracking
  • Purity ethane
  • Natural gas liquids (NGL)
  • Naphtha, gas oil and flexible feed crackers
• Coal to olefins
• Ethanol dehydration

Any person, company or government interested in producing or purchasing ethylene, or designing or constructing ethylene plants, should be aware of the competitive positions within the global ethylene industry.  IHS Chemical, utilizing its extensive databases, models and expertise, has prepared the Cost Curve Service to address this need.

• The deliverable is an interactive Excel spreadsheet that will allow the user to toggle and create key graphs and tables
  • Global curves for current year, future year, five years out and one historical year for reference
  • Charts showing costs by year for world and ten geographic regions, broken down by net feedstock cost, variable costs and fixed costs.
  • Regional averages and all individual plants for any given region plotted on the curve
  • Breakdown of capacity by technology or feedslate for world and 10 geographic regions
  • Cost summary tables showing number of production units, total capacity, average capacity, with total cash cost broken down into feedstock cost, co-product credit, net feedstock cost, variable cost, fixed costs, for world and each of ten geographic regions
• The service will include an executive overview, summarizing the key findings from the analysis
• Regional cost structure is included along with production cost economics for major technologies
• Capacity data by unit is included for all years covered in the analysis
• The Cost Curve Service will be updated twice a year on same schedule as the IHS Chemical World Analysis – Ethylene, typically in the late Fall and very early Spring