19 September 2011 22:01 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene margins continued to fall in the second week of September, dropping by 15% from a week earlier on lower spot prices and higher production costs, the ICIS margin report showed on Monday.
Ethylene margins were at 26.88 cents/lb ($593/tonne, €433/tonne) in the week ended 16 September, down from 31.61 cents/lb a week earlier, using ethane as a feedstock.
The drop last week followed a nearly 4% average decline in ethylene spot prices, as the monomer traded at 57.25–60.00 cents/lb for September delivery, down from 60.00–62.00 cents/lb a week earlier.
Market sources continued to point to looser supply, citing a delay in a Dow Chemical cracker turnaround in ?xml:namespace>
Dow was expected to shut down the 610,000 tonne/year cracker in
A Dow spokesperson did not respond to requests for comment.
On the feedstock side, ethane prices spiked last week, rising by nearly 20% from a week earlier to 85 cents/gal, on increased demand and talk that pipeline issues were affecting ethane and propane deliveries into the Mont Belvieu area.
Ethane demand also strengthened because Dow was said to have been caught short on the feedstock after pushing back its
The pipeline issues and the turnaround delay may both have played a role in pushing up ethane, a market participant said, also citing weakening co-product values as a factor keeping ethane competitive as a cracker feedstock.
Ethane lost some strength toward the end of the week, ending Friday at 79 cents/gal and dropping to 76.00–76.50 cents/gal on Monday.
Ethylene also posted heavy losses on Monday, trading down to 55.50 cents/lb for September delivery.
($1 = €0.73)
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