Glut of raw materials for plastics and synthetic rubber lowering prices

Plastics Jun 27, 2012 No Comments

Plastics symbolsEthane at the Mont Belvieu, Texas trading hub, a traditional pricing benchmark, sold for 28.4 cents per gallon Tuesday, down from a peak average of 89 cents in October, according to Platts research. Propane at Mont Belvieu sold for 79.65 cents per gallon, down from $1.47 a gallon in October.

The weak prices, which may last for several years due to a mismatch between supply and demand according to many market observers, could provide an unexpected hit to earnings and cash flow for many exploration and production companies.

 The U.S. saw record production of natural-gas liquids, or NGLs, in 2011, of about 2.18 million barrels per day, according to the Independent Petroleum Association of America.

Natural-gas liquids, produced from oil and natural-gas wells, are forms of gas that are liquid when they reach the surface or are easily turned into a liquid. They have many uses but are mainly used in making plastics and synthetic rubber.

via For Energy Producers, Natural Gas May Not Be the Only Source of a Glut – WSJ.com.

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Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.

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