06 June 2012 21:34 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene margins shed 11% last week, dropping to their lowest level since January on reduced ethylene spot prices and lower co-product prices, the ICIS margin report showed on Wednesday.
Ethylene margins were assessed at 35.02 cents/lb ($772/tonne, €618/tonne) in the week that ended on 1 June, down from 39.42 cents/lb a week earlier, using ethane as a feedstock.
The figure is the lowest since margins were at 26.65 cents/lb in the first week of 2012.
The drop last week put average margins in May at 42.21 cents/lb, down by nearly 25% from 56.13 cents/lb in April, according to the report.
US margins fell in May as a result of a 16.50 cent/lb slump in ethylene spot prices during the month.
Ethylene for prompt delivery ended May trading at 46.50 cents/lb, down from deals done at 63 cents/lb early in the month.
The downtrend in the spot market and lower production costs pushed the US ethylene contract down by 16% to 46.25 cents/lb in May.
The drop was the sharpest for a single month since the monomer fell by 9.50 cents/lb in November 2008 in the wake of the global financial crisis that year.
US ethylene margins may have bottomed out with the contract reduction in May, an analyst said, predicting an end to downstream de-stocking by mid-June and more stability for derivative prices in the coming months.
($1 = €0.80)
Follow William on Twitter
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections