19 September 2011 22:37 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene spot prices remained on a sharp downtrend on Monday, trading 3% lower on talk of looser supply, weakening demand and inventory trimming.
September ethylene traded at 55.50 cents/lb ($1,224/tonne, €894/tonne), down from a deal done at 57.25 cents/lb on Friday.
The drop on Monday followed a 7.6% slump in spot prices during the previous two weeks.
Ethylene ended August trading at 63.000–63.875 cents/lb.
Market sources said the downtrend in September stemmed from looser supply, citing a delay in a Dow Chemical cracker turnaround in Louisiana that was originally scheduled for October.
Ethylene supply also may be loosening as producers could be reducing inventories in September because of end-of-quarter capital issues, a consultant said.
But a slowdown in demand also was eroding support for the monomer, sources said, pointing to weaker US derivative exports, particularly of polyethylene (PE).
The US ships out 15–20% of its PE production, but demand for the US resin is slowing because of a drop in Asian prices.
PE demand also remained weak in most US market segments, according to sources.
($1 = €0.73)
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