29 August 2013 20:37 [Source: ICIS news]
HOUSTON (ICIS)--US forward-month ethylene spot prices started to decline on Thursday as short-term supply concerns softened, sources said.
US ethylene for September, which remains the forward month until Sunday, fell to 55.25 cents/lb ($1,218/tonne, €914/tonne) based on trades done in the middle of the week.
Spot prices for September ethylene were at 55.625 cents/lb to close the week ended 23 August.
Most of the fall is attributed to the recent restarts of Westlake’s Petro 1 Lake Charles cracker in Louisiana and Dow Chemical’s No 7 Freeport cracker in Texas.
The two crackers have a combined ethylene capacity of 1.156m tonnes/year.
Sources also expected ExxonMobil’s Baton Rouge cracker in Louisiana to restart soon, although a pipeline complication could delay the restart.
A bigger spot ethylene fall took place for October material, which will assume forward-month status on Sunday.
The first reported trade for October ethylene was heard at 56.25 cents/lb on 20 August. On Wednesday, October ethylene spot prices fell to 54.75 cents/lb, based on a trade.
Sources said that ethylene spot prices are still higher than expected as market players are preparing for hurricane season.
Several sources said the market is preparing for tighter supply because of several shutdowns during the US hurricane season.
If there is little to no loss of supply, sources expect to see a steep drop in ethylene spot prices in the fourth quarter.
($1 = €0.75)
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