The UK ethylene conundrum – lowering costs but lengthening volumes

In recent months there have been several announcements to the market from INEOS and Shell that will impact the historical overall UK ethylene balance in terms of capacity to produce versus capacity to consume. On balance, these developments lead to a theoretical loss of 350 ktpa of ethylene consumption in the UK. The UK ethylene industry is structurally long with finite ethylene export capability today via the North Tees and Mossmorran terminals. The UK ethylene plants have also seen significant investment in infrastructure and development, particularly around accessing USA ethane imports for feedstock. This insight will explore in detail by site UK ethylene supply, UK ethylene demand, export infrastructure and volumes and provide commentary around this lowering cost position, but lengthening volume position. Possible options and consequences will also be highlighted in the concluding remarks.