US spot ethylene prices close week on uptrend

HOUSTON (ICIS)–US spot ethylene prices rose on Friday to close the week on an uptrend, following higher energy costs.

Sources said October product traded at 20.5 cents/lb ($452/tonne) on Friday, up from 18.5 cents/lb the day prior.

Much of the increase is likely due to higher feedstock ethane costs, which have been rising on increasing demand from crackers.

As butane prices have climbed, ethane has returned to its favoured status for cracker feedstock, sources said.

The rise in butane is tied to increased demand from the gasoline sector, which is likely to remain strong during the winter months.

The US spot ethylene market is also firmly in contango, with several October vs November and November vs December deals done at 1 cent/lb in contango.

Sources have previously said that the low spot ethylene prices in recent weeks likely represented a floor, leading to expectations for a rebound.

Ethylene demand is also likely to improve in the short term as several downstream units are restarted and higher oil prices could lead to more derivative exports.