04 January 2012 19:01 [Source: ICIS news]
HOUSTON (ICIS)--US spot ethylene traded sharply higher on Wednesday, climbing by 5% from a week earlier on growing supply tightness amid the start of a heavy maintenance season in the US.
Ethylene for January traded earlier in the day at 56.750 cents/lb ($1,251/tonne, €963/tonne), up from a deal done at 53.875 in the last week of December.
Market sources said ethylene spot availability is limited and sellers are holding on to inventories, likely the result of anticipated supply tightness because of planned cracker shutdowns in the US Gulf.
The new year started with at least one cracker being taken off line, as Shell began maintenance at its Norco complex in Louisiana. Shell confirmed it has shut down one of its units, but declined to disclose any details.
The shutdown is the first of as many as three possible shutdowns that could occur in January.
According to sources, ExxonMobil has planned a shutdown at its Baytown complex in Texas, where the company has two crackers with a combined ethylene capacity of 2.2m tonnes/year.
The turnaround could last 45 days, according to a consultant.
It is unclear if ExxonMobil will shut one or both units. Talk emerged this week that the turnaround could be delayed, but the information could not be verified with ExxonMobil because the company does not comment on its operations.
Other producers with scheduled maintenance in the coming months include Dow Chemical, which sources said plans to shut down one of its Louisiana crackers; BASF, which has a 934,000 tonne/year cracker in Port Arthur, Texas; and INEOS, which has two crackers with a combined 1.8m tonnes/year of capacity in Chocolate Bayou, Texas.
LyondellBasell and Chevron Phillips Chemical are also said to have planned maintenance turnarounds in the first half of the year.
($1 = €0.77)
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