Shale gas boom benefiting North American plastics producers


The shale gas boom is a story not going away anytime soon, and for good reason. The supply of inexpensive natural gas-based feedstocks in North America is having a direct effect on the production of ethylene, the chemical building block for a number of plastics, including polyethylene (PE), according to IHS, a global source of critical information and insight.

"These new feedstocks are giving North American producers an advantageous, low-cost position compared to most of the global competition," said Nick Vafiadis, senior director, global polyolefins and plastics at IHS Chemical. "Those cost-advantages are providing these producers strong financial incentives to establish new facilities and to operate them at full capacity, but the implications for the market are quite disruptive, and the industry is evolving rapidly."

"Part of the disruptive force goes back to the fact that since the cost of resin is the single largest expense for plastics producers, competing material makers are aggressively repositioning for North America's manufacturing renaissance," Vafiadis said, "while, at the same time, brand owners are re-examining both virgin materials and new composite options as sources for their production."
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