US ethylene cycle to see 'double peak' in coming years, will lead to higher margins due to low feedstock costs, higher operating rates, Dow CEO says; US ethane market to continue to be long in next 4-5 years, will extend favorable feedstock prices

NEW YORK , February 19, 2013 () – Dow Chemical Chairman, President and CEO Andrew Liveris predicts that the US ethylene cycle will achieve a 'double peak' in the coming years in the form of higher margins because of low natural gas liquids (NGL) feedstock costs and higher operating rates. The US ethane market will continue to be long in the next 4-5 years, bringing in an extended period of favourable feedstock prices. With global demand exceeding supply in the coming few years and world GDP grows further, operating rates are seen to increase to higher than 90%, resulting in a substantial margin expansion. Dow expects to take advantage of low ethane prices to prop up its $25 bn (EUR 19 bn) asset base in the USA. The firm also anticipates benefiting from low propane prices as some of its crackers use propane as feedstock. In 4Q 2012, Dow recorded a 35% year-on-year gain in earnings to $389 M, despite sales down 1.3% to $13.9 bn. The shale gas cost advantage is exemplified in the strong showing of its performance plastics segment, with earnings before interest, tax, depreciation and amortization (EBITDA) jumping 24% to $829 M. Original Source: ICIS Chemical Business,, Copyright Reed Business Information Limited 2013.

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