US Nov ethylene contract expected up slightly

HOUSTON (ICIS)–The US November ethylene contract is expected to move up slightly, sources said on Monday, tracking higher spot prices in the month.

Sources said they expect an increase of 0.25 cents/lb ($6/tonne) from the October settlement of 28.25 cents/lb.

The October settlement was the lowest since contracts were done at 27.75 cents/lb for November 2003.

The expected increase in this year’s November contract is mostly tied to higher spot values for the month compared with October.

Demand was strong throughout November and October, but spot supply tightened in November on several unplanned cracker outages.

Sources pegged the increase in November over October at about 1.5 cents/lb.

The increase in spot pricing was mostly balanced by lower costs, which sources said fell around 1 cent/lb month on month.

Co-product credit values were up slightly, while feedstock ethane costs fell throughout November, pushing more cracker operators toward it as a feedstock.

Propane and butane prices were up and down during the month, pushing some operators away from them for feedstock purposes.

US ethylene contracts typically settle at the start of the month for the previous month.

Major US ethylene producers include Chevron Phillips, ExxonMobil, INEOS, LyondellBasell and Shell Chemical.

Major US buyers include Axiall, Dow Chemical, Occidental Chemical and Total.