Atlantic Basin petrochemical uplift vs. yields, by year
2024 Atlantic Basin petrochemical uplift by product group
20
20
Ole ns and polyole ns showed the strongest uplift to margins with aromatics adding little or even negative value A - aromatics O -ole ns P -polyole ns AO -aromatics and ole ns etc.
15
15
10
10
5
5
0
0
-5
-5
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
Petrochemicals yield of total products (wt%)
Petrochemicals yield of total products (wt%)
2024 2023 2021
Linear (2024)
Linear (2023)
Linear (2021)
A O AO
PO
APO
OPO AOPO
Figure 3 Petrochemical net cash margin uplift ($/bl).
Source: Wood Mackenzie REM-Chemical s
to chemicals, given that China’s transport fuel demand is falling. In aggregate, annual ethylene capacity additions outpace demand growth for the next three years, preventing the typical cycle of margin trough and recovery. Any recovery is ‘L-shaped’, so it will not be quick, resulting in less competitive steam crackers across Europe and Asia remaining under threat of closure for some time. For commodity chemical companies, 2026 is a year to survive, with the hope that rationalisation is something that happens to others. Petrochemicals adding value to refining Despite the weak chemical margins,
petrochemicals are a source of value addition for the refining sector, as shown in Figure 3 . These charts show the value uplift expressed in net cash margin terms against petrochemical yield over recent years. The value uplift from petrochemicals was stronger in 2024 than in 2023, with 2021 a year the chemical sector will remember fondly, as it was the last year of high profitability. The charts show that typically the greater the yield of petrochemicals, the higher the value uplift, with the olefins/polyolefins value chain adding the most value. It is important to note that low yields of petrochemicals can destroy value, given the higher operating costs of such facilities.
2024 Atlantic Basin HVO GPW contribution and yields
2024 Atlantic Basin renewable fuel gross margins
900
20
20
Europe North America
Europe HVO GPW contribution %
18 16
18 16
800
North America HVO GPW contribution % 2024 avg. GPW contribution 2023 avg. GPW contribution N. America HVO yield (wt%) Europe HVO yield (wt%)
700
14
14
600
12
12
500
10
10
400
8 6
8 6
300
HVO gross margin contribution fell by 2.54 US$/bbl
200
4
4
100
2
2
0
0
0
SAF (Used cooking oil)
Bio-naphtha (Used cooking oil)
HVO (Used cooking oil)
Figure 4 Liquid renewable GPW contribution and gross margins ($/tonne).
Source: Wood Mackenzie Refinery Evaluation Model and Liquid Renewable Fuels Service
www.decarbonisationtechnology.com
7
Powered by FlippingBook