European Storage Market

The European diesel market may see a short-term upswing on the storage enquiries with the flow of ships coming from the USA after hurricane Harvey. Around 1.8 million tons are set to reach Europe and the Mediterranean in November from Asia and the Middle East, that would mark a 50% increase from recent months. When Harvey struck the US Gulf in late August, traditional trading routes were retraced. Europe became a key supplier for Latin America and even the US East Coast, draining stocks to below their 5-year average.

EPCA finds optimism in Europe

New production capacities are coming on-stream, an improving economy results in higher chemical product use, a continued relative low oil price are the main drivers for this optimism. The European producers are digitally more advanced than their counterparts in the US and the Middle East, the challenge is reducing costs to be competitive with the lower costs countries.

Production and capacity are in much better balance with companies better positioned to challenge the threat from the new capacities overseas. Ethylene and propylene production in Europe has increased in recent years while cracker capacities have dropped. The rebalancing in terms of supply and demand has underpinned better operating rates and profitability.