02 February 2013 01:57 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for January settled on Friday at 48 cents/lb ($1,058/tonne, €783/tonne), rising by 3.50 cents/lb from December on the back of higher spot prices in the past few weeks.
US ethylene contracts normally settle at the beginning of the month for the previous month.
The nearly 8% increase for January came as production costs were largely steady last month, while spot prices rose by just over 15% as a result of a spree of plant outages in the past few weeks.
At least five US crackers in December experienced unplanned outages, the impact of which spilled over into January, while three planned shutdowns last month and two unplanned outages lent further support to monomer prices.
The January increase, which is the first since ethylene contracts rose by 2.25 cents/lb in September 2012, has nearly erased the 3.75 cent/lb reduction in October-December.
However, news of the settlement for January came as spot ethylene began to give back part of its recent gains.
Ethylene for January traded at 65.000-65.125 cents/lb this week, down from 66.750-68.250 cents/lb a week earlier.
Spot market activity this week was mostly centred on February ethylene, which was transacted at 66 cents/lb early in the week before losing steam and trading a few times at 64 cents/lb in the past two days.
The softening came amid news that BASF TOTAL Petrochemicals had begun the restart process of its Port Arthur cracker in Texas.
The 934,000 tonne/year cracker was taken down on 18 January for planned maintenance. The unit was expected to be fully operational by 2-3 February, a company spokesperson said.
The cracker is a joint venture between BASF and Total.
Ethylene for February was heard bid at 63.25 cents/lb late on Friday against a 65.00 cent/lb offer.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.
Buyers include Dow Chemical, Georgia Gulf, Occidental Chemical and Total.
($1 = €0.74)
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