European firms face disadvantage in petrochemical production

06/14/2013 | Reuters

Increases in U.S. natural gas production are boosting U.S. chemical producers but hurting European manufacturers, according to this analysis. BASF, SABIC and LyondellBasell are among the affected producers, as they still use naphtha as feedstock in their European plants. "Operators of European naphtha crackers have a problem," said Berenberg Bank analyst Jaideep Pandya. "In a nutshell, it's about propylene, butadiene, and benzene prices. You need to be compensated somewhere for the cheaper ethylene."

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