EPCA ’11: US ethylene margins fall 40% after price slump

03 October 2011 17:25  [Source: ICIS news]

(adds missing word "ethane", paragraph 6)

BERLIN (ICIS)--US ethylene margins collapsed in the last week of September, dropping by 40% from a week earlier following a slump in ethylene spot prices and an increase in ethane costs, the ICIS margin report showed on Monday.

Ethylene margins were at 12.89 cents/lb ($284/tonne, €213/tonne) in the week ended 30 September, down from 21.57 cents/lb a week earlier, using ethane as a feedstock.

The 8.68 cent/lb decline resulted from increased ethane costs, a 5.5% fall in co-product credits and an 8.3% fall in ethylene spot prices.

September ethylene traded last week at 49.00-50.25 cents/lb, down from 52.75-55.50 cents/lb a week earlier. The monomer ended August trading in a range of 63.000-63.875 cents/lb.

The 22% drop in spot prices in September will weigh on contract negotiations for the month, but sources said a surge in feedstock ethane prices last month would offset most of the decrease.

Mont Belvieu ethane ended Friday at 87 cents/gal, up by 24% from 70 cents/gal a month earlier, lifted by firm demand, logistics issues and short covering in the last week of September.

Ethylene spot prices averaged 57.44 cents/lb for September, while ethane prices averaged 78.63 cents/gal.

US third-quarter ethane and naphtha-based ethylene margins were around 10% lower than second-quarter average margins, as assessed by ICIS.

($1 = €0.75)

For more on ethylene visit ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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