01 September 2011 22:14 [Source: ICIS news]
HOUSTON (ICIS)--Initial US ethylene settlements for August were agreed at 55.50 cents/lb ($1,224/tonne, €857/tonne), down by 1.25 cents/lb from July, market sources said on Thursday.
The 2.2% reduction resulted from a drop in production costs last month, which offset an increase in average ethylene spot prices.
July ethylene settled at 56.75 cents/lb, as assessed by ICIS.The initial drop for August surprised some market participants, who had expected a smaller decline for the month.
A larger drop was needed to keep US ethylene derivatives competitive in the export market, a source said.
US ethylene contracts usually settle at the beginning of the month for the previous month.
Spot ethylene for September traded on Thursday at 63.50 cents/lb, flat with a deal on Wednesday.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.
Buyers include Dow Chemical, Georgia Gulf, Occidental Chemical (OxyChem) and Total.
For more on ethylene visit ICIS chemical intelligence
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