02 December 2011 19:17 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for November settled on Friday at an increase of 1 cent/lb ($22/tonne, €16/tonne), lifted by higher spot prices last month.
The increase, which puts the monthly contract at 55 cents/lb, came as spot prices rose by around 4% in November, more than offsetting a drop of 1.5% in feedstock ethane prices.
US ethylene contracts usually settle at the beginning of the month for the previous month.
The settlement for November leaves the monthly contract with a premium of around 8% compared with December spot deals done this week.
Ethylene for December began the week trading at 51 cents/lb, but a deal was heard on Friday at 50.50 cents/lb.
The softening is the result of weaker demand and increased supply as US crackers are all in operation, a market source said.
While the outlook for December is potentially weaker, as indicated by lower spot prices this week, market conditions could change in January, when two US crackers are said to have scheduled maintenance, kicking off a busy turnaround season for next year.
According to sources, seven US crackers are scheduled to go off line in the first half of 2012.
Most of the shutdowns will happen in the second quarter, when five units are scheduled to go down.
At least two other crackers also have planned maintenance in the second half of the year, according to sources.
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.
($1 = €0.74)
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