11 October 2013 21:46 [Source: ICIS news]
HOUSTON (ICIS)--US front-month spot ethylene fell 9.3% week on week as long supply and steady demand push prices down, sources said on Friday.
US spot ethylene remained at a 15-month low after a trade at 43.625 cents/lb ($962/tonne, €712/tonne) on 10 October.
Source said that long supply is coming from a high operating rate at US crackers, as only one is down for unplanned maintenance.
Additionally, supply in Texas has been bolstered because of the ongoing shutdown of the Evangeline Pipeline, which is not expected to be back up until January 2014, sources said.
The pipeline shutdown has prevented several ethylene producers in Texas from moving material to their preferred destinations in Louisiana.
This has also created a 22 cent/lb discount in ethylene on the Texas-based Williams system compared with the Louisiana-based Choctaw system.
Sources said the long supply is more than enough to offset a slight increase in demand as several downstream polyethylene (PE) and polyvinyl chloride (PVC) have resumed operations in the past two weeks.
However, there are still several downstream plant issues, and high prices have limited most sales to domestic deals as exports are non-competitive.
Feedstock costs for ethylene have also dipped slightly from late-August peaks despite the strong operating rates at US crackers.
($1 = €0.74)
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