US Nov C2 margins down 1 cent/lb - Deutsche Bank

10 December 2007 22:09  [Source: ICIS news]

HOUSTON (ICIS news)--Average combined contract/spot US ethylene margins fell by 1 cent/lb ($22/tonne) to 4 cents/lb in November amid a run-up in crude oil and feedstock prices, Deutsche Bank said on Monday.

US large buyer contract ethylene margins in November were up by 0.5 cents/lb at 8.8 cents/lb, but spot ethylene margins collapsed to minus 0.7 cents/lb, the first negative figure since mid-2005, the bank said.

US ethylene production costs in November rose by 3.5 cents/lb to 51.7 cents/lb on a weighted average, Deutsche Bank said, adding that year-through-November ethylene production costs were up by 68%.

Average US ethylene margins were expected to remain under pressure, as feedstock costs will likely stay above 50 cents/lb in the winter months, the bank said.

US ethylene contract prices in November were partially settled at 61.5 cents/lb, up 4 cents/lb from October, according to global chemical market intelligence service ICIS pricing, which assessed US spot ethylene prices in a range of 50-51 cents/lb on Monday.

Deutsche Bank said it expects US ethylene contract prices to remain flat in December amid minimal turnaround activity and softening derivative demand.

US ethylene producers have nominated contract increases of 5 and 6 cents/lb for December.

Chevron Phillips Chemical, Equistar, ExxonMobil, INEOS and Shell Chemicals are among the major producers of ethylene in the US.

By: William Lemos
+1 713 525 2653

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