Ethane prices should drop as pipelines come on line – Dow

27 October 2011 19:23  [Source: ICIS news]

HOUSTON (ICIS)--US ethane prices should fall as companies add more pipelines and fractionation capacity, the chief executive of Dow Chemical said on Thursday.

US ethane prices have risen to the 90s cents from the 70s cents/gal in March.

Ethane is the preferred feedstock in the US, and ethylene margins have consequently fallen because of the price increase for the natural gas liquid (NGL).

The compression, though, should be temporary, said Andrew Liveris, Dow chief executive.

Liveris made his comments during an earnings conference call.

He attributed the run-up in ethane prices to pipeline constraints.

As more pipelines connect the US Gulf to the Marcellus shale in the northeast, ethane prices should fall, Liveris said.

In addition, more fractionation capacity should come on line, further increasing ethane supplies, he said.

"Ethane futures speak to lower ethane pricing for the very short to medium term," Liveris said.

For more on ethylene visit ICIS chemical intelligence
For more on Dow visit ICIS company intelligence

By: Al Greenwood
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