US Feb ethylene contracts initially settle down 1.4%

HOUSTON (ICIS)–US February ethylene contracts initially settled down 1.4%, sources confirmed on Monday.

The drop of 0.50 cent/lb ($11/tonne) puts February contracts at 34.75 cents/lb, their lowest since September 2009, when they settled at 34.50 cents/lb.

The drop was in line with market expectations, as spot prices in February fell more than cracker cash-costs rose.

The fall in spot prices was largely the result of long supply and weak demand in the market, caused by several recent cracker restarts and a lack of export opportunities for derivatives.

The increase in cash costs came as feedstock propane and naphtha values started rebounding alongside global oil and energy markets.