05 September 2012 18:19 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for August rose by 4 cents/lb ($88/tonne, €70.4/tonne) to 46 cents/lb, market sources said on Wednesday, following a jump in spot prices and slightly higher production costs last month.
The settlement, a nearly 10% increase from July, came after spot prices rose by 14% in August as a result of outages and reduced operations at some US crackers.
At least two units were taken off line in Louisiana last week as Hurricane Isaac swept through the state, leaving widespread power outages and flooding in its trail.
The storm forced other crackers in the region to run at lower rates, further affecting monomer supply.
The outages drove August ethylene spot prices up to 59.25 cents/lb last week, raising the average price for the month to 53.18 cents/lb.
The figure compares with 46.72 cents/lb in July.
Ethylene production costs also climbed slightly in August on higher ethane costs.
Mont Belvieu ethane prices averaged 35.403 cents/gal last month, up from 34.313 cents/gal in July.
Ethane accounts for around 60% of the feedstock volumes used to make ethylene in the US.
The product traded down to 33 cents/gal on Wednesday.
Ethylene spot prices were also weakening as the monomer traded at 59.75 cents/lb for September delivery, down from 61.50 cents/lb on Friday.
One market participant said spot prices seemed "over-cooked" after sustained gains in recent weeks and the spike caused by Hurricane Isaac.
($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