30 August 2011 20:07 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene margins rose by 2.7% in the fourth week of August, lifted by higher ethylene spot prices and softer production costs, the ICIS margin report showed on Tuesday.
Ethylene margins were at 34.27 cents/lb ($756/tonne, €522/tonne) for the week ended 26 August, up from 33.36 cents/lb a week earlier, using ethane as a feedstock.
US margins rose as ethylene spot prices climbed by 1% last week on inventory building ahead of upcoming cracker turnarounds, market sources said.
Ethylene for August traded at 62.50–63.25 cents/lb, up from 61.75–62.75 cents/lb during the week that ended on 19 August.
The increase in spot prices was driven by anticipated supply tightness because of scheduled maintenance at four US crackers in September and October.
Two crackers are expected to go off line on 1 September, including ExxonMobil's 1m tonne/year Baton Rouge unit in Louisiana. The cracker will be down for 45 days, according to information in the market.
Formosa will also shut down one of its Point Comfort crackers in Texas on 1 September. The 816,000 tonne/year unit will be off line for up to 40 days.
Shell is expected to follow with a 45-day turnaround on 1 October at its 835,000 tonne/year Deer Park plant in Texas, while Dow Chemical will shut down its 610,000 tonne/year St Charles cracker in Louisiana on 10 October for 30 days.
Formosa confirmed its turnaround, but the other three producers declined to comment on their forthcoming shutdowns.
US ethylene is holding on to its gains so far this week, with September trading at 63.000 and 63.125 cents/lb on Tuesday, up from 61.750–63.125 cents/lb last week.
($1 = €0.69)
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