US spot ethylene trades at 9-month low on long supply

20 September 2013 16:22  [Source: ICIS news]

US spot ethylene trades at 9-month low on long supplyHOUSTON (ICIS)--US front-month ethylene traded at a nine-month low on Friday as supply remains long and demand steady.

US September ethylene was done at 51.625 cents/lb ($1,138/tonne, €842/tonne) on Friday.

That is the lowest front-month ethylene has traded since two deals at 50.75 cents/lb in early December 2012.

Sources said that with only one major cracker down, the US market is well-supplied, putting downward pressure on prices.

“Nobody thinks supply will be an issue for a while,” a trader said. “There are no major operations issues, and there haven’t been any hurricanes.”

The long supply is outweighing mixed demand. Some sources said demand is steady to strong, while others said demand is softening.

Demand is expected to soften in the fourth quarter as inventory control measures take place and the holiday build is completed.

Also, ethylene buyers in the polyethylene (PE) and polyvinyl chloride (PVC) markets said their material is not attractive to overseas buyers, limiting export opportunities.

The strong production levels for ethylene have not pushed up feedstock ethane costs, sources said.

Additionally, global crude oil futures have slipped since peaking in early September, easing feedstock costs for propane and paraffinic naphtha.

($1 = €0.74)

By: John Dietrich

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