Comments on: European Union Moves to Ban Most Plastics By 2020 https://www.frackcheckwv.net/2014/01/18/european-union-moves-to-ban-most-plastics-by-2020/ Just another WordPress site Wed, 14 Feb 2024 02:06:39 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Jim Cutler https://www.frackcheckwv.net/2014/01/18/european-union-moves-to-ban-most-plastics-by-2020/#comment-48167 Jim Cutler Sun, 19 Jan 2014 18:17:03 +0000 http://www.frackcheckwv.net/?p=10784#comment-48167 I find the article “European Union Moves to Ban Most Plastics By 2020” very interesting. As industry followers know, there are a number of world scale ethylene and polyethylene production facilities scheduled for construction in the US Gulf Coast. Some of this announced polyethylene production is scheduled for export to Europe. While the European polyethylene (PE) price will be set by the price of naphtha feedstock, the physical size of the European market will not be as robust as it could be after restrictions on certain plastic products (i.e. polyethylene bags) and the required increased recycling of plastics. Also, Europe's import tariff on PE resins is expected to remain at 6.5%. Tariff and increasing freight costs will continue to impact US PE pricing netbacks. Bans on certain plastic materials and increased plastics recycling, will curtail European plastics market growth. This means that the proposed USGC PE projects will face both lower netbacks and a smaller market in Europe. The mega "world scale" sized projects on the USGC, when they become operational, will want to operate at 100%. Many of the same companies that produce ethylene also produce polyethylene. It will be interesting to note whether PE prices will ultimately fall in the US, or if higher ethylene transfer prices will support higher PE prices. I find the article “European Union Moves to Ban Most Plastics By 2020” very interesting. As industry followers know, there are a number of world scale ethylene and polyethylene production facilities scheduled for construction in the US Gulf Coast. Some of this announced polyethylene production is scheduled for export to Europe.

While the European polyethylene (PE) price will be set by the price of naphtha feedstock, the physical size of the European market will not be as robust as it could be after restrictions on certain plastic products (i.e. polyethylene bags) and the required increased recycling of plastics.

Also, Europe’s import tariff on PE resins is expected to remain at 6.5%. Tariff and increasing freight costs will continue to impact US PE pricing netbacks. Bans on certain plastic materials and increased plastics recycling, will curtail European plastics market growth. This means that the proposed USGC PE projects will face both lower netbacks and a smaller market in Europe.

The mega “world scale” sized projects on the USGC, when they become operational, will want to operate at 100%. Many of the same companies that produce ethylene also produce polyethylene. It will be interesting to note whether PE prices will ultimately fall in the US, or if higher ethylene transfer prices will support higher PE prices.

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