30 March 2010 18:54 [Source: ICIS news]
SAN 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 ?xml:namespace>
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)
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