US ethylene spot prices rise on expected tight supply

20 August 2013 20:46  [Source: ICIS news]

 US ethylene spot prices rise on expected tight supplyHOUSTON (ICIS)--US spot ethylene prices for the future and forward month rose on Tuesday, tracking increased concerns about supply.

Ethylene for August traded twice on Monday at 55.75 cents/lb ($1,229/tonne, €922/tonne), up from the previous week’s four highest trades at 55.00 cents/lb.

Ethylene for September traded at 57.00 cents/lb, higher than the previous week’s highest trade of 56.75 cents/lb.

Also, ethylene for October had its first reported trade at 56.25 cents/lb.

“This has nothing to do with increasing demand,” a producer said. “This is supply related.”

Market sources said they heard that Shell Chemical started having production issues at one of its Deer Park crackers on Tuesday.

Shell Chemical has an ethylene capacity of 835,000 tonnes/year at its Deer Park site in Texas.

Attempts to reach Shell for comment were unsuccessful, and sources said it remained unclear how long any possible outage would last, or if there were a genuine outage.

However, following the talk of the possible issues, spot prices moved up.

Before news of the possible issue hit the market, bids for August and September material had been scarce.

“People were trying to wait out higher prices,” the producer said.

In addition to the possible Shell Chemical issues, sources said Westlake’s 544,000 tonne/year Lake Charles No. 1 cracker is down and that Williams Olefins’ 612,000 tonne/year Geismar cracker in Louisiana remains down.

Those two crackers represent roughly 6-7% of the US ethylene capacity.

($1 = €0.75)

By: John Dietrich

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