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The market for commodity petrochemicals and plastics suffers from price volatility. Enron is reshaping the industry's exposure to fluctuating prices by broadly introducing financial risk management products. Offering instruments such as swaps, caps, floors and collars, Enron is helping producers and consumers alike neutralize the price volatility that has interrupted their businesses for decades.
Price management can help petrochemical and plastics companies:
- Smooth earnings
- Facilitate efficient working capital and cash flow management
- Provide flexibility for customer's pricing needs
- Create greater certainty for financing, investment, and acquisition decisions
- Improve and refine financial leverage
These financial products are the same ones used to manage price risk in other commodity markets, including foreign exchange, interest rates, agriculture, and oil and gas. Exposure to sustained price volatility is a distinct disadvantage when it comes to competing for capital in the global marketplace and it is no surprise that demand for price risk management is coming of age in the petrochemicals and plastics industry.
Our financial activities involve these and other commodities:
| Polyethylene |
ethylene |
ethane |
natural gas |
| Polypropylene |
propylene |
propane |
naphtha |
| Polystyrene |
styrene |
butane |
MEG |
| PVC |
benzene |
xylene |
butadiene |
| PET |
tolulene |
methanol |
MTBE |
To learn more about hedging techniques utilizing swaps, options, and other specific instruments, follow these links:
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