27 June 2008 17:45 [Source: ICIS news]
HOUSTON (ICIS news)--US ethylene producers nominated increases of 8-18 cents/lb ($176-$397/tonne, €111-250/tonne) for July amid a continued surge in the upstream energy complex, market sources said on Friday.
Three producers nominated 12, 13 and 15 cents/lb, respectively, while a fourth producer is seeking between 8 and 18 cents/lb for July, depending on the average crude oil price during the month.
The 8 cent/lb nomination would apply if crude averages less than $135/bbl, while the top initiative would be sought if crude averages more than $145/bbl, according to sources.
The initiatives for July came while June contracts were partially settled at plus 5.00 cents from May at 70.50 cents/lb. Market sources said a full settlement for June at that level could be reached next week.
Sentiment about July contracts was mixed.
While one source said a double-digit increase in July was a possibility, another said the top initiatives put forth were not realistic.
“It does not facilitate for a quick settlement,” the source said.
All buyers agreed that producers were faced with escalating cash costs, but one participant said the steep initiatives for July were only a hedge against possible new spikes in crude oil during the next 30 days.
Crude oil hit an all-time high of $142.26/bbl on Friday.
Spot ethylene prices were up this week, although activity was largely subdued except for Monday, when several deals for July were done.
Ethylene for July traded in a range of 67.50-68.50 cents/lb on Monday, up from deals done at 64.50-65.50 cents/lb in the week ended 20 June, according to global chemical market intelligence service ICIS pricing.
An ethylene bid/offer for July was heard at 66.00-69.25 cents/lb on Friday.
Chevron Phillips, Equistar, ExxonMobil, INEOS and Shell Chemicals are among the major producers of ethylene in the ?xml:namespace>
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