NPRA '10: US ethylene seen downward, but seller unconcerned

30 March 2010 18:54  [Source: ICIS news]

Ethylene sellers not concernedSAN ANTONIO, Texas (ICIS news)--US ethylene is headed for what could be a major drop in the coming months, but a seller on Tuesday seemed unconcerned, saying producers are likely to keep making money in a downward market.

Ethylene could drop by 20 cents/lb ($440/tonne, €326/tonne) and [margins] will still be good,” the source said on the sidelines of the National Petrochemical & Refiners Association (NPRA) meeting in San Antonio, Texas.

Spot ethylene for March traded at 61.00-63.00 cents/lb during the week ended 26 March, down from 67.00 cents/lb a week earlier, according to global chemical market intelligence service ICIS pricing.

Feedstock ethane prices are also weakening, keeping ethylene margins at acceptable levels, the source said.

Ethane prices were at 56 cents/gal on Friday, down from 73 cents/gal in the first week of March, according to ICIS pricing.

US ethylene spot prices spiked in the first quarter, lifted by tight supply caused by a series of cracker outages in the US in the first two months of the year.

The surge pushed spot prices to 70.00 cents/lb in early March, boosting US margins to record levels.

The seller did not project a timetable for the expected drop, but the source indicated a correction is inevitable.

“It will come back to whatever normal is supposed to be,” the seller said.

The NPRA’s International Petrochemical Conference (IPC) runs through Tuesday.

($1 = €0.74)

For more on ethylene visit ICIS chemical intelligence
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