13 April 2011 00:13 [Source: ICIS news]
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HOUSTON (ICIS)--US spot ethylene continued to fall in the evening on Tuesday, trading as low as 58.50 cents/lb for April delivery, market sources said.
With the latest decline, spot ethylene prices had fallen by 10% in one day.
Ethylene for April/May traded at 60.00 cents/lb ($1,323/tonne, €913/tonne), down from deals done as high as 65.25 cents/lb on Monday.
Market sources said the plunge came in response to losses in the upstream energy complex, including a drop of nearly 6% in crude oil prices so far this week.
The front-month West Texas Intermediate (WTI) contract shed $3.67/bbl on Tuesday, settling at $106.25/bbl.
That compares with a closing of $112.79/bbl on Friday.
Brent crude settled on Tuesday at $120.92, for a $3.06/bbl loss from the previous settlement.
Losses in the crude oil market intensified on Tuesday after a large US investment bank warned that crude prices had climbed far above the values supported by supply/demand fundamentals.
On the feedstock side, ethane prices dropped by 7.5% to 67-68 cents/gal, from 73 cents/gal on Friday, outpacing the slump in crude oil and putting additional pressure on ethylene.
The drop in ethylene prices on Tuesday erased most of the gains accumulated since the last week of March, when the monomer traded at 60.625-62.375 cents/lb.
"It is a big correction," a market source said, attributing the sudden decline to lower crude oil and ethane values.
Ethylene bid/offers for April were heard at 59.00-60.75 cents/lb late on Tuesday.
($1 = €0.69)
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