US ethylene contract settles up 8.5 cents

29 September 2005 21:34 [Source: ICIS news]

HOUSTON (ICIS news)--US ethylene supply partners agreed to an 8.5 cents/pound (187.34 or Euro155.58/tonne) increase on a three-month settlement, market sources said on Thursday. Several firms also were seeking a 10-cent price increase for October.

Following difficult negotiations on a tight supply/demand situation, July was settled at 37.5 cents/pound delivered, up 0.5 cents/pound; August at 40.5 cents/pound delivered, up 3 cents/pound; and September at 45.5 cents/pound delivered, up 5 cents/pound delivered, sources said.

Market players said that a supply shortage caused by cracker outages prior to Hurricane Rita and shutdowns ahead of the storm contributed to finalising negotiations.

Before the three-month settlement, producers were pushing for a 1 cent/pound hike on July prices and settled at this increase with plastics market customers. However, vinyls market customers opposed the 1 cent/pound hike and pushed for a 0.5 cent/pound increase instead, citing weak demand.

Chevron Phillips, Lyondell and Shell proposed a 10 cent/pound increase in October contracts. Market major ExxonMobil had yet to announce October hikes. It is unclear whether customers would accept the increases.

Shell, Chevron Phillips and Innovene maintained force majeure on ethylene supply.

By: Dayna Owens
+1 713 525 2653

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