NexantThinking TM. Low Density Polyethylene (LDPE) Process Evaluation/Research Planning. PERP December 2013

Transcription

1 NexantThinking TM Process Evaluation/Research Planning Low Density Polyethylene (LDPE) PERP December 2013

2 JobNumber PER P PRO GRAM PER P NexantThinking TM Process Evaluation/Research Planning Low Density Polyethylene (LDPE) PERP December 2013 Luann M. Farrell This Report was prepared by Nexant, Inc. ( Nexant ) and is part of the NexantThinking suite. Except where specifically stated otherwise in this Report, the information contained herein is prepared on the basis of information that is publicly available, and contains no confidential third party technical information to the best knowledge of Nexant. Aforesaid information has not been independently verified or otherwise examined to determine its accuracy, completeness or financial feasibility. Neither Nexant, Subscriber nor any person acting on behalf of either assumes any liabilities with respect to the use of or for damages resulting from the use of any information contained in this Report. Nexant does not represent or warrant that any assumed conditions will come to pass. The Report is submitted on the understanding that the Subscriber will maintain the contents confidential except for the Subscriber s internal use. The Report should not be reproduced, distributed or used without first obtaining prior written consent by Nexant. Each Subscriber agrees to use reasonable effort to protect the confidential nature of the Report. Copyright by Nexant Inc All rights reserved.

3 INTRODUCTION Low density polyethylene (LDPE) is used in plastic bags and sheet, plastic wrap, stretch wrap, pouches, extrusion coating, toys, lids, pipes, buckets and containers, cable sheathing, and flexible tubing. LDPE is the original form of polyethylene, having been invented by ICI in LDPE is produced from ethylene, while EVA (ethylene vinyl acetate) is produced in LDPE reactors from ethylene and vinyl acetate monomer. There are two basic processes to manufacture LDPE, tubular and autoclave, with each licensor adding specific variations. Most recent developments have been focused on tubular reactors, with little development in the autoclave process. The combination of the rationalization of capacity (mostly autoclave) and the larger sized tubular reactors has led to the reversal of relative market share between the processes. Installed LDPE Capacity by Process, 2012 Tubular 65% Autoclave 35% A _Figures.xlsx\Capacity_by_Process With the advent of linear low density polyethylene, produced through low pressure processes, production of LDPE was forecast to decline, in favor of the new materials. This had the effect of bringing investment in the development of traditional high pressure technology to a near halt, there was a similar hiatus in building of new high pressure LDPE plants, and some older units were closed. In practice, the new materials disappointed in some key performance areas, most notably processability and optical properties, and the demand for LDPE continued, but at a lower rate. The under investment in new high pressure capacity led to high utilization rates, and markets became tight, leading to LDPE commanding a premium over LLDPE. The growing realization that LLDPE properties were unlikely to exactly match those of LDPE in the medium term, plus the good financial performance of LDPE facilities, gave rise to renewed interest in LDPE. This in turn led to the investment in new plants of a greatly increased size and a re-examination of LDPE technology, seeking cost and performance improvements. 1

4 CURRENT TECHNOLOGY LDPE is the original form of polyethylene, having been invented by ICI in There are two basic processes to manufacture LDPE, tubular and autoclave, with each licensor adding specific variations. All technologies are mature, with the first autoclave process commercialized by ICI in 1938 and the first tubular reactor invented by BASF in 1938 with commercial production in For technology licensors, cost reduction and product enhancement of their technologies are critical. For tubular technologies, in an effort to reduce unit operating costs, licensors have continued to increase reactor capacity, with most licensors offering single-line capacities of 400 to 450 thousand tons per year. For autoclave technologies, most large single-line reactors have been under 150 thousand tons per year, but 200 thousand tons per year is available. Nexant evaluated various tubular and autoclave processes that are well-established, commercially practiced technologies for the production of LDPE and EVA resin, and are generally available for license. The evaluation provides a general process description with simplified flow sheets for each process type, plus recent developments, highlighting key developments relating to each process technology, and background, including general product capabilities and a list of licensees, for each technology covered. The technologies discussed in this report are: Tubular processes ExxonMobil LyondellBasell (LUPOTECH T) SABTEC (CTR) Versalis Autoclave processes ExxonMobil ICI (through Simon Carves) LyondellBasell (LUPOTECH A) Versalis PROCESS ECONOMICS Nexant developed and compared cost of production estimates for the major commercial LDPE and EVA processes using the U.S. Gulf Coast (USGC) as the basis. Since major capacity additions are planned in China and the Middle East, Nexant also developed economics for these locations. Cost estimates were evaluated for the following processes: Tubular processes Autoclave processes ExxonMobil LDPE homopolymer and EVA with 18% vinyl acetate comonomer LyondellBasell LDPE homopolymer and EVA with 18% vinyl acetate comonomer SABTEC LDPE homopolymer ExxonMobil LDPE homopolymer, EVA with 18% and 28% vinyl acetate comonomer LyondellBasell LDPE homopolymer, EVA with 18% and 28% vinyl acetate comonomer Detailed cost tables are presented for the USGC, while summary tables are included for the other locations. All detailed cost tables given in this report include a breakdown of the cost of production in terms of raw materials, utilities, and direct and allocated fixed costs. These categories are presented by unit consumption, per metric ton, and annually. The contribution of depreciation and a simple nominal return on capital are also included to arrive at a cost estimate. 2

5 COMMERCIAL MARKET REVIEW LDPE is used in plastic bags and sheet, plastic wrap, stretch wrap, pouches, extrusion coating, toys, lids, pipes, buckets and containers, cable sheathing, and flexible tubing. Film applications are the largest end use for LDPE, accounting for 64 percent of demand on a global basis. Extrusion applications account for more than 20 percent of demand. Global LDPE Demand by End-Use, 2012 Blow Molding 3% Injection Molding 5% Film 64% Extrusion Coating 11% Other Extrusion 10% Others 7% A _LDPE Demand.xlsx\Global Commercial applications are outlined in the report Demand, supply, and net trade data are given and discussed for Global, North America, Western Europe, and Asia Pacific. A list of plants in each of these regions is given showing company, location, current plant capacity, and technology employed. 3

6 Nexant, Inc. San Francisco New York Houston Washington London Frankfurt Bahrain Singapore Bangkok Shanghai Kuala Lumpur 4