HOUSTON (ICIS)--US spot ethylene prices fell on Thursday despite a cracker shutdown and expected supply tightness.
US front-month January ethylene traded as low as 55.75 cents/lb ($1,229/tonne) after ending Wednesday at 58.00 cents/lb.
Traders said that ethylene prices had been rising at the start of the week on expectations of supply tightness, as the first quarter is typically the US cracker turnaround season.
Spot prices ended the previous week at 58.375 cents/lb. However, US spot ethylene has been volatile since 6 January, with prices hitting 56.75 cents/lb before rebounding to the 58.00 cent/lb level two days later.
Sources said that despite the shutdown of Chevron Phillips’ Port Arthur cracker in Texas early in the week, spot prices have been pushed down on weak demand from the polyethylene (PE) market.
Additionally, there are some concerns that weakness in crude oil could lead to weaker feedstock costs in February and March, so sellers have started moving material earlier than planned.
“No one wants to cross the 60 cent/lb barrier right now,” a buyer said. “There’s no reason to be worried, but that isn’t what the market is doing.”
The Thursday drop in front-month ethylene also extended to future-month February ethylene, which traded as low at 56 cents/lb, again despite expectations of supply tightness in coming months.