US ethylene margins up 3.7% on spot price gain, cheaper feed

30 July 2012 19:08  [Source: ICIS news]

HOUSTON (ICIS)--US ethylene margins rose by 3.7% in the last week of July as a result of lower ethane costs and higher ethylene spot prices, the ICIS margin report showed on Monday.

Ethylene margins were assessed at 36.84 cents/lb ($812/tonne, €658/tonne), using ethane as a feedstock, up from 35.53 cents/lb in the week that ended on 20 July.

The increase followed a drop in the price of ethane, which ended Friday at 38 cents/gal, dropping by 7.3% from 41 cents/gal a week earlier.

An average gain of nearly 1% in the price of spot ethylene also helped fuel margins.

Ethylene for July traded last week at 48.750-49.375 cents/lb, rising from 47.500-49.750 cents/lb a week earlier.

The increase came after news that Flint Hills Resources (FHR) had shut down its Port Arthur cracker in Texas to repair a steam leak.

The 621,000 tonne/year cracker is expected to be restarted later this week, a market source said.

The information could not be confirmed with FHR because the company does not comment on its operations.

Ethylene for July was bid on Monday at 47.50 cents/lb against a 49.50 cent/lb offer.

September ethylene traded at 48 cents/lb earlier in the day.

Meanwhile, Mont Belvieu ethane prices dropped to 37.50 cents/gal, likely reflecting lower crude oil futures.

($1 = €0.81)

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By: William Lemos
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