28 March 2011 22:47 [Source: ICIS news]
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The increase was based on a range of spot deals done at 58.50-60.00 cents/lb, which is up from 54.75-58.00 cents/lb in the week ended 18 March.
Ethylene also traded at 60.625 cents/lb at the end of last week. The deal was not included in the range because information on the transaction became available only after margin calculations had been completed.
Market sources continued to point to strong demand as a reason behind the uptrend in ethylene, but an additional driver emerged last week after Shell announced it would allocate US deliveries of the product in April.
The company will restrict US ethylene deliveries to 90% next month, market participants said.
According to sources, Shell is still having difficulties accessing storage wells in Mont Belvieu,
That probably caused the spot market to move further up, a source said, referring to the allocation announcement.
Higher energy prices in recent weeks, anticipated supply tightness and constrained supply were all heard as also lending support to spot ethylene.
The rise in ethylene spot prices in the last four weeks is expected to trigger another contract increase for the monomer.
Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.
For more on ethylene visit ICIS chemical intelligence
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