Higher Demand and Feedstock Costs Surge the Linear Alpha Olefins Prices in the US

The Linear Alpha Olefins (LAO) market recently observed a considerable surge in the offered quotes in the US domestic region throughout the first quarter of 2023 amid increased demand from polyethylene markets, higher feedstock Ethylene prices, and enhanced supply chain operations. Supply chains around the world have improved since China eased its severe covid restrictions and employees began returning to work following the lunar new year festival. The use of ethane reduces the production cost significantly, and thus the demand is increasing rapidly.

The offered quotations in the US market for LAO C10 FOB US Gulf increased by 12.5% in February to USD 900 per tonne from USD 800 per tonne in January. Again, in March 2023, the prices soared by 22.2% to USD 1100 per tonne. Similarly, the discussions for LAO C12-14, C16-18, and C20 (FOB US Gulf) are 20-30% in the US domestic region in the first quarter of 2023.

Because of resource depletion, the extraction of Crude Oil has become exceedingly costly. This provides the way for the use of alternative, cost-effective, and bio-based feedstocks in the production of olefins. The olefin market is focusing on the utilization of biomass, a carbon-rich resource, as a feedstock. The producers' goal is to make the ideal use of bio-based goods with high efficiency so that production becomes cost-effective.

The US-based energy and chemical manufacturer producer stated that they are on the course for a mid-2023 startup of its LAO plant in Baytown, Texas. The market giant has trademarked the new name, consisting of isotactic propylene repeat units with random ethylene distribution, and the new plant will have a capacity of 350,000 tonnes per year.

In October 2022, the corporation said that the LAO plant would produce ten high-purity products. At the time, ExxonMobil claimed that more than half of the nameplate capacity of the LAO plant would most likely be for captive use, with the remainder supplied externally under the brand name ELEVEXX™, marking ExxonMobil's entry into the LAO market.

To boost the rates of production, the organization completed an extension of its refinery in Beaumont, Texas, in the first quarter of 2023, adding 250,000 barrels per day of crude processing capacity. The expansion of the project is anticipated to increase the total refinery capacity to exceed 630,000 barrels per day, making the organization one of the largest in the United States.

Companies are investing in the development of new olefin-generating technologies to improve the way polymers and chemical precursors are generated and separated while using less energy and producing less waste. The company's primary focus is on developing new profit from existing streams while capturing energy savings and lowering its carbon footprint.

The worldwide marketing manager for LAO, Mike Fanset, explained that the organization intends to bring a collaborative approach to the market by combining its manufacturing and technical expertise with customers' formulation expertise to create a winning postulation. He further said that since the company is vertically integrated across several market applications, its positioning is better to provide customers with end-to-end solutions.

The new manufacturing facility will be furnished with cutting-edge quality control technology, such as in-line analyzers that will test product quality and purity in real-time, boosting finished LAO molecule consistency and supply consistency.