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NPE2018 Show Daily - Friday

NPE is truly ‘Breaking the Mold’ as a multifaceted experience, with activities, discoveries and opportunities to satisfy the needs of anyone who works in the plastics industry or has a need to know about plastics

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FRIDAY NPE 2018 : THE PLASTICS SHOW SHOW DAILY Shale-Gas, continued from page 10 CoolingCare Cleans Conformal Cooling Lines As conformal cooling has continued to pick up steam, users are now ask- ing, How do we clean those lines? DME (Booth W2703) has developed a solution attracting attention, so much so that all the literature is gone! It's called CoolingCare, and it uses patented high pulsation dynamics to clean clogged lines. It also provides intelligent monitoring of the cleaning pro- cess, which falls in line with the industry's focus on data. LOVING THE SHOW? MARK YOUR CALENDAR FOR THE NEXT ONE! NPE2021 is scheduled for May 17-21, 2021, at the Orange County Convention Center right here in Orlando, Florida. 2021 94 RTi's Mark Kallman expects lower ethylene pricing to drive PVC prices down until the projected strong con- struction season gets underway, which could drive prices higher. RTi's Scott Newell does not expect a flood of PP imports, though that will depend on domestic PP pricing. Nick Vafiadis of IHS Markit says the PP price forecast is closely linked to prices of propylene monomer and the arbi- trage with Asian resins. PCW's David Barry says further PE price erosion could be limited by new ethylene steam crackers not being completed on time to supply all the new PE resin capacity. RTi's Mike Burns sees the 2018 PE market as one in which processors have the edge. B U L K M AT E R I A L H A N D L I N G S Y S T E M S E N S I G N E Q.C O M l 61 6. 7 3 8 .9 0 0 0 l SA L E S @ E N S I G N E Q.C O M Booth W8780 Chemicals (Room W207AB); ChevronPhil- lips, and Braskem (Booth S22001); with oth- ers underway from such as LyondellBasell (Room W205ABC). Foreign investors have included a joint bimodal HDPE venture be- tween South Africa's Sasol Chemical N.A. and Ineos Olefins & Polymers. Also to use Ineos' HDPE technology is a new petrochemical complex planned near Dilles Bottom, Ohio, from Thailand's PTT's affiliate PTTGC America LLC. Even more new capacity is slated to come on stream within the next few years, includ- ing a proposed petrochemical joint venture project to be built in Texas by ExxonMobil and SABIC, Houston, that would include two PE units and a petrochemicals complex. Yet another ambitious petrochemical complex is planned for Potter Township, Pennsylvania, to be owned and operated by Shell Oil Co. Shell selected the site due to its prime loca- tion within the Marcellus Shale and has cited that its proximity to both supply and markets will provide regional plastics manufacturers with more flexibility and shorter supply chains. Plans call for 3.3 billion lb/yr of eth- ylene and three PE units with combined pro- duction of 3.5 billion lb/yr. PE Price Trends Look Rosiest Asked how he sees things shaping up for PE processors in terms of demand, David Barry, senior editor at PCW, notes that by all ac- counts, processors at large appeared to have good momentum through first quarter and into the second. In fact, the 2018 PE market is so far prov- ing to be one in which processors have the edge, according to Mike Burns, RTi's vice president of client services for PE. Similarly, Nick Vafiadis, VP, global polyolefins and plas- tics, at IHS Markit, also expects to see PE prices move even lower. "Now that produc- tion constraints have been mostly resolved, we are seeing that premium begin to be re- moved. In addition, we are currently seeing more than 3.5 million tons of new PE pro- duction capacity in start-up or ramp-up mode. This new production capacity is ex- pected to directly affect global PE prices and indirectly impact domestic price levels." Barry notes that Asia could prove to be a "giant sponge for North American PE exports this year, given growing consumption abroad and a tight ethylene supply. "Chinese de- mand for virgin resin is also getting a kick from the implementation of their scrap im- port ban," he says. A key takeaway from most industry pros is that the new PE capacity is not a key deter- minant for domestic prices. RTi's Burns says oil prices continue to dictate PE pricing, as 65 percent of global PE is made from oil-de- rived naphtha. "North America needs to price PE resins within 10/lb of the global price to keep a balance between imported finished products (particularly plastic bags and shrink films) and exported resins." PP Pricing Outlook More Mixed IHS Markit's Vafiadis notes that while the PE price forecast is more closely related to sup- ply/demand issues associated with PE resin, the PP price forecast is more closely linked with propylene monomer movements and the arbitrage with Asia. As had been project- ed by both Vafiadis and Scott Newell, RTi's vice president of PP markets, PP prices dropped by double digits within first quarter. Says Vafiadis, "We expect this downward price trend to continue through the summer, as PP prices track propylene prices. Propyl- ene has to come down enough for PP suppli- ers to attempt to expand their margins with- out affecting the price arbitrage with Asia." He predicts that suppliers will seek margin expansion in the second half of the year, though there are already attempts to pass such increases this month. PP demand has been relatively lackluster and industry pros expect demand to accelerate starting this month as prices have been corrected. PVC Pricing Mixed First quarter saw PVC prices move up before it ended but that increase was nixed in April and, in some cases prices were even lower. Both Mark Kallman, RTi's v.p. of client ser- vices for engineering resins, PS and PVC and PCW's senior editor Donna Todd cite ample supply, lower feedstock costs, particularly ethylene, along with a drop in exports for the flat-to-downward trend. However, more stable pricing is expected starting this month as robust seasonal demand for PVC kicks in. Kallman notes that PVC suppliers' operating rates are up in the 90 percentile due to low feedstock costs, and will remain as such, with both domestic and exports demand strengthening. Impact on Styrenics, Engineering Resins RTI's Kallman notes that shale-gas produc- tion tends to favor lower-cost light feed- stocks for crackers, which reduces the out- put of benzene, propylene, and butadiene. This can contribute to higher prices for these key feedstocks at times of heavy demand, reduced refinery operations, or lower im- ports. Kallman sees the impact of resulting higher feedstock costs to be greatest at the commodity end of the scale, namely for PS and ABS. Kallman says nylon 6 prices are strongly influenced not only by supply and demand, but also by benzene price swings. In the case of PC and nylon 66, Kallman points out that they are more strongly influenced by supply/ demand dynamics. Strong demand growth for both resins is led chiefly by the automo- tive sector. But even though PC suppliers were seeking price increases of 14/lb in the first quarter, Kallman predicted that most buyers would be able to negotiate a signifi- cantly lower hike. This is owing to supplier inventories growing from improved plant production and continued significant PC imports, due to major capacity expansions in Asia, making for a more competitive environment.

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