05 January 2012 15:20 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for December settled at 54.75 cents/lb ($1,207/tonne, €929/tonne), market sources said on Thursday, confirming an initial agreement reached earlier this week.
The small drop came as feedstock ethane prices softened in December, more than offsetting an increase in ethylene spot prices last month.
Mont Belvieu ethane prices in December averaged around 80 cents/gal, down from 87 cents/gal in November, while ethylene spot prices averaged 51 cents/lb, up from 50 cents/lb.
US ethylene contracts usually settle at the beginning of the month for the previous month.
The reduction in the contract price erased part of an increase in November, but is likely to be short-lived because spot ethylene prices began January on a sharp uptrend.
Ethylene for January traded on Wednesday at 56.750 cents/lb, up from a deal done at 53.875 in the last week of December.
Market sources said ethylene spot availability in the US was limited, adding that sellers were holding on to inventories likely as a result of anticipated supply tightness because of planned cracker shutdowns in January.
The new year began with one cracker being taken off line, as Shell is carrying out maintenance at its Norco complex in Louisiana.
The company confirmed it had shut down one of its units, but declined to disclose any details.
The shutdown is the first of possibly as many as three crackers that could go off line this month, according to sources.
Another five US crackers are said have to planned maintenance in the second quarter.
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 = €0.77)
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