NEW YORK (ICIS)--US ethylene oxide (EO) reached a double-month contract settlement for March and April on the back of a double-month settlement in the feedstock ethylene contract, market sources confirmed on Monday.
March contract prices were assessed down 4.4-5.0% to 65.20-74.70 cents/lb ($1,437-1,647/tonne) free on board (FOB) from 68.60-78.10 cents/lb FOB in February.
April contract prices were assessed up 2% to 66.40-75.90 cents/lb FOB from March values.
The double-month settlement in feedstock ethylene showed a 4.25 cent/lb decrease to 45.25 cents/lb delivered (DEL) for March contracts and a 1.5 cent/lb increase to 46.75 cents/lb DEL for April contracts. The February ethylene contract price was 49.50 cents/lb DEL.
The majority of EO contracts are formula-based, and price movement comprises 80% of the change in the monthly ethylene price settlement and an additional conversion fee, or adder. Market sources have said that they did not see a change in the adder fee for 2014 from the previous year.
EO supply is expected to remain tight through the second quarter (Q2) following a recent plant turnaround and several cracker outages that are expected to limit ethylene availability, said a market source.
Huntsman went into a six-week planned turnaround at the end of March for its EO unit at its Port Neches plant in Texas. The EO unit has not yet started back up because the Port Neches site experienced an unplanned outage over the weekend from an electrical interruption, a company official said.
The Port Neches plant has an EO capacity of 460,000 tonnes/year and an ethylene glycol (EG) capacity of 255,000 tonnes/year.
EO is largely used to make EG. The second-largest outlet is in surface active agents, including non-ionic alkylphenol ethoxylates and detergent alcohol ethoxylates.
EO producers in the US include BASF, Dow Chemical, Eastman, Formosa Plastics, Huntsman, Indorama Ventures, LyondellBasell and Shell Chemical.