15 May 2013 17:54 [Source: ICIS news]
HOUSTON (ICIS)--US spot ethylene prices moved above the 60 cents/lb level for the first time in a month on Tuesday, tracking tight supply.
Sources said trades for front-month ethylene were done twice at 62.000 cents/lb ($1,367/tonne, €1,052/tonne) and once at 62.375 cents/lb.
The previous week’s range of spot trades done for the front month was between 58.0-58.5 cents/lb.
The trades are the first done above 60.00 cents/lb since 11 April, when a trade for front-month ethylene was completed at 60.25 cents/lb.
Several unplanned cracker outages are driving the increase in spot values, sources said.
The surge in spot ethylene prices could lead to an increase in the next contract settlement.
Currently, US contract ethylene prices are at March levels, as an April settlement has not been reached.
The delay in reaching the April settlement has market players predicting a two-month settlement for April and May, which will likely be reached in early June.
US ethylene contracts typically settle at the start of the month for the previous month.
Early indications for the April contract were for a decline of 0.75-1.00 cents/lb, based on spot ethylene being traded firmly below 60 cents/lb.
The recent run-up could lead to a two-month settlement at a rollover or a slight increase, sources said.
Major US producers of ethylene include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemical.
Major buyers include Axiall, Dow Chemical, Occidental Chemical and Total.
($1 = €0.77)
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