04 October 2012 22:37 [Source: ICIS news]
Ethylene spot margins in January-September averaged 43.52 cents/lb (€33.94 cents/lb), using ethane as a feedstock, a 58.4% increase from 27.47 cents/lb in 2011, an ICIS assessment showed.
Although margins have risen steadily in the past three years, profitability in the
“No doubt the
The driver behind such a bounty is no doubt the price of ethane, which accounts for around 60% of
Mont Belvieu ethane ended September trading at 32 cents/gal, up from 29 cents/gal at its low point in June, but down by more than half from 78 cents/gal in the first week of January.
The reduction stemmed largely from increased production, which is up on average by 10% this year compared with 2011.
But ethane prices also dropped because of weaker demand, resulting from a series of cracker shutdowns earlier this year.
The shutdowns, which at one point left the market with a surplus of 85,000 bbl/day of ethane – enough to feed a world-scale cracker – were also behind an unprecedented rise in ethylene spot prices earlier this year.
Ethylene for prompt delivery, which this week was transacted at 57.50 cents/lb, surged to 76.125 cents/lb in April as supply tightened when as many as eight
April was also a record period for US ethylene margins, which averaged 56.13 cents/lb that month.
The outlook for the fourth quarter points to stable or potentially lower prices as hurricane season is virtually over and the last three cracker turnarounds planned for 2012, now underway, will be completed in a few weeks.
($1 = €0.78)
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