US ethylene margins fall 2.1% on jump in ethane costs

HOUSTON (ICIS)–US ethylene margins fell 2.1% week on week for the week ended 17 April, the ICIS margin report showed on Monday, mostly from a climb in feedstock ethane costs.

Margins for ethane-based spot ethylene fell to 28.55 cents/lb ($629/tonne) from 29.15 cents/lb the previous week.

Most of the decline stemmed from rising ethane costs, which moved to 7.43 cents/lb from 7.32 cents/lb.

With cracker operating rates high in Texas and Louisiana, demand for ethane for chemical production is also high.

Additionally, ethane had regained its cost advantage over propane and butane, pushing buyers back into the market.

Spot ethylene prices fell slightly during the week, by 0.25-1.00 cent/lb, holding within their narrow range in spot trading as supply remains long.

A jump in ethane cracker co-product credits, to 2.48 cents/lb from 2.35 cents/lb, helped slow down the margin loss for ethylene.

On Monday, front-month April ethylene traded at 34.5 cents/lb, down from its previous reported trade at 35.0 cents/lb.