28 February 2013 20:03 [Source: ICIS news]
HOUSTON (ICIS)--US February ethylene contracts are expected to roll over or fall slightly, sources said on Thursday.
Most sources expected a rollover at 48 cents/lb ($1,058/tonne, €804/tonne) as declines in the average spot price were mostly balanced by higher production costs.
The spot price average for February fell to just less than 63 cents/lb, compared with January’s average of just less than 64 cents/lb.
Production costs for ethylene were estimated to have increased by 0.25 cents/lb. This combination could lead to decreases in the contract price of 0.25-0.50 cents/lb, sources said.
However, the small changes in February were expected to lead to a rollover, especially as spot ethylene prices rallied slightly in the last week of the month.
Several deals for February material were heard between 62.125-63.000 cents/lb, up from a lone deal in the third week of February at 62.000 cents/lb.
US ethylene contracts typically settle at the beginning of the month for the previous month.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.
Major buyers include Axiall, Dow Chemical, Occidental Chemical and Total.
($1 = €0.76)
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