US PE margins increase 2.2% on lower feedstock costs

11 June 2012 16:37  [Source: ICIS news]

HOUSTON (ICIS)--US polyethylene (PE) margins rose by 2.2% last week, as a drop in feedstock ethane costs outweighed a drop in co-product prices, the ICIS margin report showed on Monday.

Integrated domestic PE margins were assessed at 57.68 cents/lb ($1,272/tonne, € 1,017/tonne) for low density polyethylene (LDPE) and 46.13 cents/lb for high density polyethylene (HDPE) blow moulding in the week that ended on 8 June. That represents a 1.22 cent/lb increase from a week earlier, using ethane as a feedstock.

The margin boost was a result of an 8.4% drop in ethane feedstock costs to their lowest level since December 2002. That decline outweighed a 2.4% fall in co-product credits, according to the report. Co-product credits are the price at which products such as propylene, butadiene and benzene, which are made along with ethylene in the cracking process, can be sold.

Integrated spot export PE margins fell by 1.34 cents/lb, as a 2.5 cent/lb drop in export PE prices and a 3.5% decrease in co-product credits outweighed the cheaper ethane costs, the report states.

($1 = €0.80)

By: Michelle Klump
+1 713 525 2653

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