US ethylene margins up 2.7% on higher spot prices

HOUSTON (ICIS)–US ethylene margins rose 2.7% during the week ended 27 November, tracking a slight increase in spot prices.

Margins for ethane-based spot ethylene moved up to 15.20 cents/lb ($335/tonne) from 14.80 cents/lb the previous week.

Front-month spot prices gained 0.25 cents/lb week on week, with trading thin because of the US Thanksgiving holiday.

Sources said demand for spot ethylene remains healthy but that inventory and storage concerns have limited buying availability for some.

Margins were also boosted by a drop in feedstock ethane costs, which fell to 7.80 cents/lb from 7.83 cents/lb.

Global commodity prices have been falling on year-end declines in demand, and low ethane prices have pushed cracker operators to favor it over other feedstocks.

Cracker co-product credit values rose during the week, to 2.01 cents/lb from 1.88 cents/lb, also giving ethylene margins a boost.

On Monday, front-month November ethylene was offered at 21.5 cents/lb against no fresh bids.