02 February 2012 14:37 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for January began to settle on Thursday at an increase of 1 cent/lb ($22/tonne, €17/tonne), lifted by higher spot prices last month.
The initial settlement puts the monthly contract at 55.75 cents/lb.
The 1.8% increase in January was fuelled by a jump in spot prices, which more than offset a reduction in production costs last month.
Ethylene spot prices in January averaged 58.75 cents/lb, rising from 51.07 cents/lb in December.
The increase was driven by tightening supply amid the start of a busy cracker turnaround season in the US.
The scheduled shutdowns, combined with some minor unplanned outages, have dampened demand for ethane, the price of which averaged 66.77 cents/gal in January, down from 80.66 cents/gal in December.
Ethane accounts for around 60% of the feedstocks used in the US ethylene industry.
US ethylene contracts usually settle at the beginning of the month for the previous calendar month.
A full-market settlement is expected to be reached by the end of the week.
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