05 August 2014 22:58 [Source: ICIS news]
HOUSTON (ICIS)--US ethylene contracts for July have fully settled 3.7% higher from June, sources confirmed on Tuesday.
The July settlement puts ethylene contracts at 49.5 cents/lb ($1,091/tonne), an increase of 1.75 cents/lb from June pricing.
Sources said the increase came mostly on the back of higher spot prices, with average prices in July climbing by about 6 cents/lb, while costs fell by about 2 cents/lb.
"The recent run-up in spot prices is simply due to multiple supply disruptions, including Equistar [LyondellBasell], Williams and CP Chem [Chevron Phillips Chemical] force majeure," a buyer said.
While LyondellBasell has lifted its force majeure at its La Porte cracker in Texas, Williams and CP Chem are delaying the restart of their production facilities.
Williams intends to initiate the restart process of its Geismar cracker in Louisiana in September, with first ethylene production and sales targeted for October.
Meanwhile, CP Chem is evaluating the situation at its Port Arthur cracker in Texas, adding that it is still too early to provide specifics on how long the facility will be down.
However, market sources said that speculation on the Port Arthur restart has ranged from the end of August to the end of the year.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemical.
Major buyers include Axiall, Occidental Chemical and Total.
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