NPRA ’11: US March ethylene contracts poised for 8% jump

28 March 2011 21:48  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--US ethylene contracts for March could rise by at least 4 cents/lb ($88/tonne, €62/tonne), market sources said on Monday, citing higher production costs and a jump in spot prices.

The 8% hike would be the second in as many months, as February ethylene settled at 49.00 cents/lb, up by 3.75 cents/lb from January.

Market sources said ethane and spot ethylene were both lending support to the contract side.

Spot ethylene for March traded last week in a range of 58.500-60.625 cents/lb, rising from deals done at 50.750-52.000 cents/lb four weeks earlier.

Meanwhile, production costs rose as ethane, which accounts for more than half of US cracker feedstocks, posted a 7.6% gain in the period.

Mont Belvieu ethane ended Friday at 71 cents/gal, rising from 66 cents/gal in the week ended 4 March.

Firm downstream demand also pushed the monomer contract up, market participants said during the International Petrochemical Conference (IPC) in San Antonio.

According to sources, 20% of US ethylene derivative output was being exported.

For polyvinyl chloride (PVC), the number was as high as 40%, sources said.

US ethylene contracts usually settle at the beginning of the month, but the settlement applies for the preceding month.

A 4 cent/lb hike would place March ethylene at 53.00 cents/lb.

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 = €0.71)

For more about ethylene go to ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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