US ethylene margins jump 7.1% to reach record highs

HOUSTON (ICIS)–US ethylene margins jumped 7.1% week on week for the week ended 19 September, the ICIS margin report showed on Monday, reaching record highs.

Ethylene margins for ethane-based spot material rose to 67.59 cents/lb ($1,490/tonne) from 63.08 cents/lb the previous week.

Margins matched front-month spot prices in reaching record highs during the week on tight supply and low inventories.

Supply is tight because of 10% of available capacity being down for turnaround, while inventories are low because of production issues in the second and third quarters.

Additionally, market players had expected longer supplies in the second half of the year, but have been hit with tightness, further boosting prices.

Feedstock ethane costs moved up slightly during the week, to 10.50 cents/lb from 10.15 cents/lb, slowing down ethylene margin growth slightly.

However, ethane cracker co-product credit values rose to 4.09 cents/lb from 3.98 cents/lb, tracking higher propylene values and boosting ethylene margins.

US spot ethylene was most recently done at 76.5 cents/lb on 19 September, with no bids or offers being reported on Monday.