AFPM '12: US MPG supply may tighten as feedstock is limited

01 April 2012 22:42  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS)--US monopropylene glycol (MPG) supply could tighten in the second quarter as feedstock producers consider cracking more ethane to take advantage of higher ethylene margins, market participants said on Sunday.

With ethylene values in the high 60s cents/lb since February and the spot price spike seen on Friday, some producers are looking to crack ethane instead of propane, limiting the co-product propylene, market players said on the sidelines of the International Petrochemical Conference (IPC).

ethylene for April traded sharply higher on Friday amid talk of outages at two crackers. April ethylene traded at 75.00 cents/lb ($1,654/tonne, €1,241/tonne), up from a deal done at 69.50 cents/lb the previous day.

The surge came amid talk that Williams and ExxonMobil were experiencing disruption at their crackers in Louisiana.

“MPG demand is down and producers want to take advantage of the margins for cracking ethane,” a distributor said.

MPG buyers and sellers have not come to an agreement for April contract pricing following price increase nominations.

Buyers said most April MPG contracts would likely roll over from March levels, despite price increase nominations of 5 cents/lb for the month.

US MPG producers include Arch Chemicals, Dow Chemical, Huntsman and LyondellBasell.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC continues through Tuesday.

($1 = €0.75)

By: Leela Landress
+1 713 525 2653

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