US ethylene margins rise on higher spot, lower feed prices

31 January 2011 20:34  [Source: ICIS news]

HOUSTON (ICIS)--US ethylene margins were up in the week ended 28 January, lifted by higher spot prices and lower feedstock costs, the ICIS margin report showed on Monday.

Using ethane as a feedstock, ethylene spot margins were at 18.20 cents/lb ($401/tonne, €297/tonne) last week, up by 3.2% from 17.63 cents/lb in the week ended 21 January.

Margins rose as spot prices gained on average 1% last week. Ethylene for January traded at 43.00-43.75 cents/lb, up from 42.750-43.125 cents/lb a week earlier.

Market sources cited a possible discount for prompt material and potentially tighter supply in the coming months, because of cracker maintenance, as the reasons for higher spot prices.

February ethylene traded at 43.125-44.500 cents/lb, leaving the market in contango.

Meanwhile, feedstock ethane ended Friday around 60 cents/gal, down from 64 cents/gal a week earlier.

Market sources said ethane was pressured by weaker demand because of competition from heavier cracker feedstocks such as propane and naphtha.

US ethylene extended the uptrend into this week, trading earlier on Monday at 46.00 cents/lb.

Conversely, Mont Belvieu ethane continued to trend lower, largely ignoring higher crude oil prices, trading at 59.25 cents/gal earlier in the day.

($1 = €0.74)

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By: William Lemos
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