23 July 2012 15:40 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene spot margins fell by 3.3% in the third week of July, pressured by higher feedstock prices, the ICIS margin report showed on Monday.
Ethylene margins were assessed at 35.53 cents/lb ($783/tonne, €650/tonne), using ethane as a feedstock, down from 36.73 cents/lb in the week that ended on 13 July.
The decline came amid a continued increase in the price of ethane, which ended Friday at 41 cents/gal, rising by 24% from 33 cents/gal a week earlier.
Ethane accounts for around 60% of the feedstock volumes used to make ethylene in the US.
NYMEX light sweet crude for August delivery ended Friday at $91.44/bbl for a weekly gain of nearly 5%. Natural gas prices gained just over 7% for the week, with the front month closing Friday at $3.081/MMBtu.
The drop in ethylene margins last week was limited by an increase in the price of spot ethylene, which traded at 47.50-49.75 cents/lb for July delivery, up from 44.25-49.00 cents/lb week earlier.
Market participants have pointed to increased demand as a result of downstream re-stocking as the underlying factor lifting US ethylene prices.
News early on Monday that Flint Hills Resources (FHR) was shutting down its Port Arthur cracker in Texas to repair a steam leak could lend further support to ethylene prices this week.
($1 = €0.83)
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