US ethylene spot prices increase, margins rise 3.2% at end June

11 July 2011 21:32  [Source: ICIS news]

US ethylene margins riseHOUSTON (ICIS)--US ethylene margins widened by 3.2% in the last week of June, lifted by higher spot prices and an increase in co-product credits, the ICIS margin report showed on Monday.

Ethylene margins rose to 25.13 cents/lb ($554/tonne, €388/tonne) last week, up from 24.34 cents/lb a week earlier, using ethane as a feedstock for the monomer.

The increase followed a 3.6% jump in ethylene spot prices and a 13.9% rise in co-product credits, which included a 1 cent/lb gain in polymer-grade propylene (PGP) prices.

Higher spot prices last week outweighed gains in feedstock costs, as Mont Belvieu ethane rose by 4% on firm cracker demand, ending the week at 81 cents/gal.

The jump in ethylene spot prices during the week ended 8 July intrigued some market participants, who saw no major changes in supply-demand fundamentals to justify the higher prices.

Ethylene for July traded at 56.25–57.75 cents/lb, up from deals done at 55.00 cents/lb in the previous week. The monomer was bid on Monday at 55.125 cents/lb with no offers.

The strength in the spot market last week could reflect pre-buying ahead of upcoming planned maintenance, one source said.

There is one confirmed turnaround in September, when Formosa will take its Point Comfort 2 cracker in Texas off line for up to 40 days.

However, market sources said at least three other major producers had planned shutdowns in the third quarter but were not publicly disclosing the information.

All US crackers were running in the last week of June, except for one small unit in Texas that experienced a mid-week outage.

($1 = €0.70)

For more on ethylene visit ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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