04 December 2012 17:33 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for November began to settle at a reduction of 2 cents/lb ($44/tonne, €34/tonne), market sources said on Tuesday, pressured by lower feedstock and ethylene spot prices last month.
The 4% drop puts the contract at 45.25 cents/lb.
A full-market agreement at that level was yet to be reached, sources said.
US ethylene contracts normally settle at the beginning of the month for the previous month.
The monthly contract had been expected to drop as a result of lower spot prices and reduced ethane costs in November.
US spot ethylene in November traded at an average of 53.11 cents/lb, down from 55.45 cents/lb in October, while ethane prices fell to 28.96 cents/gal from 32.18 cents/gal in the previous month.
The drop in ethylene prices stems from weaker demand, whereas ethane prices have softened on supply pressure and also as a result of softer demand.
Ethane accounts for around 60% of the feedstocks used to make ethylene in the US.
December ethylene traded on Tuesday at 50.75 cents/lb, on the low end of deals done at 50.625-51.750 cents/lb last week.
($1 = €0.77)
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