HOUSTON (ICIS)--The spread between US Texas and Louisiana ethylene widened on Thursday on news of a Louisiana deal done, fuelled by the ongoing delayed restart at a major cracker.
Sources said a deal for June ethylene on the Louisiana-based Choctaw System was heard at 66 cents/lb ($1,455/tonne) on Thursday.
The trade puts Louisiana ethylene at a premium of 9-10 cents/lb to Texas ethylene, which traded on 18 June at 56.25 cents/lb.
The spread had been closer to 5-6 cents/lb in early June, sources said.
“It’s a knee-jerk reaction to the Williams delay,” an ethylene buyer said. “They’re delayed another month or month and a half.”
The buyer was referring Williams Olefins’s Geismar cracker in Louisiana, the restart of which was pushed back into late July or mid-August from the end of June.
The cracker was expected to restart with an expanded capacity after an explosion more than a year ago shut down the facility.
Sources said that although the cracker restart has been delayed, the ethylene supply situation in Louisiana has been eased considerably by the recent return of the Evangeline Pipeline.
One market player said the Thursday trade for Choctaw ethylene could represent a volume of 1m lb (45,000 tonnes), which would be smaller than most transactions but large enough to be reported.