05 January 2011 19:13 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts settled on Wednesday after the market reached a two-month deal that put December at 48.50 cents/lb ($1,069/tonne, €802/tonne), up by just over 13% from October, market sources said.
Ethylene for November settled at 50.75 cents/lb, up by 8.00 cents/lb from October, while December was agreed at 48.50 cents/lb, down by 2.25 cents/lb from November.
The two-month net increase was widely expected, following a sharp increase in ethylene spot prices in November.
Spot ethylene in November surged by 26% because of multiple cracker outages, but prices retreated in December after the units were restarted.
US ethylene contracts usually settle at the end of the month being negotiated or soon after the start of the following month.
However, two- or even three-month settlements are not uncommon in the US market.
The previous double-month agreement settled July and August in the first week of September 2010.
A three-month settlement occurred in 2009, when the monomer settled for July, August and September at the same time during the first week of October 2009.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.
Buyers include Dow Chemical, Georgia Gulf, Occidental Chemical (OxyChem) and Total.
($1 = €0.75)
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