Lower natural gas prices are allowing production of some plastics and related feedstocks in the European market to return to normal, although production of some of those products is still being limited.
Sites with improved production outlined in a recent graphic from research firm ICIS include:
• Alpek returning to normal operating rates at a 480 million pound capacity PET unit in the United Kingdom.
• Radici Group in May lifted force majeure sales limits on 200 million pounds of nylon 6/6 resin production capacity in Italy.
• LyondellBasell Industries is in the process of restarting 1 billion pounds of ethylene feedstock capacity and 560 million pounds of propylene feedstock capacity in France.
According to ICIS, ongoing production cuts include:
• Dow Inc. reducing production rates on polyethylene resin by 15 percent at sites in the Netherlands, Spain and Germany. Those sites have combined annual production capacity of almost 4.2 billion pounds.
• Indorama Group operating PET resin sites in the Netherlands and Spain at reduced rates. Those sites have combined annual production capacity of almost 1.4 billion pounds.
• Plastiverd operating a 460 million pound capacity PET unit in Spain at reduced rates.
• In Lithuania, Neo Group has extended maintenance on a 350 million pound capacity PET unit and UAB Orion is operating a 580 million pound capacity PET unit at reduced rates.
Natural gas prices in Europe were at about 30 euros per kilowatt hour in mid-May. That's down about 90 percent from their levels in August 2022.
A May 18 Financial Times article said that European natural gas prices were at levels "last seen before Russia started squeezing Europe's pipeline gas supplies ahead of its invasion of Ukraine."
"The decline [in natural gas prices] highlights how Europe has largely overcome the worst of Moscow's weaponization of energy supplies," the article said. "The drop is also a sign on the ample amount already in storage as traders refill ahead of next winter, and relatively tepid gas demand in the region."