17 August 2011 15:59 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene margins posted new gains in the second week of August after lower feedstock costs outweighed a drop in ethylene spot prices, the ICIS margin report showed on Wednesday.
Ethylene margins jumped to 33.58 cents/lb ($740/tonne, €511/tonne) in the week ended 12 August, rising by 9% from a week earlier using ethane as a feedstock.
The increase, which came as a result of lower ethane prices, was the sixth weekly gain for US ethylene margins.
Mont Belvieu ethane prices fell sharply last week, pressured by lower energy prices and weaker demand because of competition from other cracker feedstocks, particularly natural gasoline.
Ethane traded as low as 65.75 cents/gal before rebounding to 71.00 cents/gal on Friday. Despite the late-week increase, the feedstock shed 11% from the previous Friday.
In the spot market, ethylene for August traded at 61.000–63.125 cents/lb, down from 63.500–64.500 cents/lb a week earlier, mainly on looser supply as US crackers were all heard to be up and running.
The market remained backwardated with September ethylene trading at 60.50–62.00 cents/lb.
Spot market activity has been subdued so far this week, but ethylene for August traded at 62.75 cents/lb on Tuesday, rising from a previous deal done at 61.00 cents/lb on Thursday.
Mont Belvieu ethane prices held steady around 71 cents/gal.
Ethylene spot prices could gain renewed strength in the coming weeks as two US crackers are scheduled to go off line for maintenance, including Formosa's Point Comfort cracker 2 in Texas.
The 816,000 tonne/year unit will go down on 1 September for 35–40 days.
ExxonMobil is also said to be planning a shutdown on 1 September at its 1m tonne/year Baton Rouge cracker in Louisiana.
The unit is expected to be off line for 45 days, according to sources in the market.
ExxonMobil has declined to comment on the shutdown, while Formosa confirmed it plans to begin its turnaround on 1 September.
($1 = €0.69)
For more on ethylene visit ICIS chemical intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections