Part 2: unlocking the value of refinery-petrochemicals integration

What is the current state of the ethylene industry?

1 minute read

The second video in this series, "What is the current state of the ethylene industry?" discusses which sites are most and least impacted during this downcycle, and why the refinery integration provides an advantage.

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The ethylene market is currently experiencing a downturn, marked by lower operating rates compared to the industry's five-year average. This decline is attributed to various challenges such as increased energy and feedstock costs, macroeconomic uncertainty affecting short-term demand, and overcapacity.

The imbalance between capacity expansion and demand growth since the start of the decade is expected to persist for the next few years, delaying market rebalancing until the latter half of this decade.

Wood Mackenzie's refinery evaluation model (REM) demonstrates that refinery cracker complexes have experienced a significant increase in net cash margins, offsetting pressures from the cracker complex by leveraging the strength of the product market sector. These sites' capacity to access a broader range of products enables them to maintain competitiveness throughout the market's downturn.

In part 3 of the series, we will explore "How do carbon emissions impact refinery competitiveness?‚Äč"

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