27 November 2012 22:16 [Source: ICIS news]
HOUSTON (ICIS)--US spot prices for Mont Belvieu ethane fell to record lows on Tuesday.
Spot prices fell to 26.50 cents/gal, tying the lowest price since ICIS began tracking the commodity in January 2011. Prices were previously at that level in July.
Since the beginning of the 2012, ethane spot prices have fallen 64% from 78.00 cents/gal.
A broker said plentiful supply and static demand have pushed prices down throughout the year.
“Crackers are running mostly [ethane] full,” the broker said. “Yet even their storage is full too, and December is not looking much better for ethane sellers either.”
An abnormally heavy turnaround season in the first half of the year also kept prices low.
Dan Lippe, the president of Petral Consulting, said ethane inventory in the Gulf Coast increased by 12-13m bbl from February to June.
During that time period ethane spot prices plummeted by 51.3%, dropping from 58.75 cents/gal at the end of January to 28.63 cents/gal at the end of June, according to ICIS Pricing.
“The recovery in demand began in July as expected but demand will have to increase further and remain at higher rates for about six to eight months before ethane inventory is once again at historic mid-range levels,” he said. “Until then, producers will be aggressive sellers into every uptick in prices – effectively aborting any sustained increase in price.”
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections