The party is over for North American petrochemical makers

It is to be Dow’s banner project of the 2020s: a low-carbon ethylene cracker, plus polyethylene plants, in Fort Saskatchewan, Alberta.The Canadian ethane that the cracker is designed to transform into ethylene will be even cheaper than US-made ethane, making the planned complex among the most cost effective in the world. Additionally, hydrogen made by the re-formation of cracker off-gases will heat the plant, while carbon dioxide emissions will be captured and stored underground.But since Dow unveiled the $6.5 billion investment in 2021, oversupply and slow growth in the petrochemical market have turned against it. Last year, Dow CEO Jim Fitterling put it on hold, remarking that a deeper and longer business trough than the company anticipated “changes our expectations for when the capacity from this project will be needed.” Last month, Dow announced that the project would go ahead, but only after a delay in completion from 2027 to 2029 to coincide with a long-awaited upswing in the market.Like the nearly constant announcements of plant closures in Europe and Asia, the delay of a project as seemingly attractive as Dow’s speaks volumes about how much the global petrochemical market is struggling. Thanks to low-cost feedstocks, North American plants have been mostly spared the chopping block. But an outlook for more expensive ethane and natural gas, plus an export market for ethylene derivatives that is stuffed to the gills, means North American producers won’t enjoy the advantage they once did. North America will continue to be an attractive place to