15 November 2013 22:27 [Source: ICIS news]
HOUSTON (ICIS)--US front-month spot ethylene traded at a four-month high on Friday as a recent rally continued.
November ethylene traded at 56.500 cents/lb ($1,246/tonne, €922/tonne), sources said, its highest since a trade at 57.375 cents/lb in mid-July.
The recent run-up in spot ethylene prices has several market players confused, as most sources said derivative demand is soft and supply is long.
“We’re getting back to where we were before the pipeline issue,” a buyer said. “That artificially deflated prices, so now they’re coming back. Why they’re doing it now, I don’t know.”
Sources said the Evangeline Pipeline, which moves ethylene between Texas and Louisiana, is not expected to return to full rates until December or January.
Several traders said the source of the buying is likely investors getting ahead of higher prices expected in December and the start of 2014.
Prices are expected to move up to start 2014 as the US cracker turnaround season starts.
Supply in the ethylene market is also thought to be balanced to long, as only one major cracker is down.
($1 = €0.74)
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