Ms. Soohyeon Kim

Ph.D. Candidate

Seoul National University

Ms. Soohyeon Kim is pursuing her Ph.D. in Energy, Environmental and Engineering at Seoul National University, Republic of Korea. The main field of expertise relates to the energy systems engineering, resources market analysis, and energy policy development. Possesses a career in at Korea Institute for Industrial Economics and Trade and joined national policy research on energy, environment, and economics.

Effects of the shale boom on ethylene and propylene prices

This study analyzed the effect of the shale boom on the olefin industries. We investigated the paths by which US natural gas prices are transferred to ethylene and propylene prices and identified the price determinants based on the supply and demand conditions of each commodity’s market. By comparing with the Japanese markets, the understanding of the supply structure of the ethylene and propylene industries is broadened. A path analysis framework was constructed to reflect the supply chains and applied to 2009–2018 data. Results showed that the downward trend in ethane prices provoked by the US shale boom reduced ethylene prices and raised propylene prices. Propane still serves as a determinant of the latter, while naphtha has lost predictive power for both. The comparative data confirmed that the US produces most of its petrochemicals from natural gas and gas-based feedstocks, while Japan relies on crude oil and refined naphtha.