US spot ethylene closes week down despite tightness

09 September 2016 23:24 Source:ICIS News

HOUSTON (ICIS)--US ethylene spot prices moved down during the week ended Friday, despite continued tight supply and higher feedstock costs.

Prices closed the week down an average of 3 cents/lb ($66/tonne) as trading activity thinned in the second half of the week.

Sources said supply remains tight, especially on news that Dow Chemical began its planned maintenance turnaround at its Plaquemine 3 cracker in Louisiana.

Several ethylene buyers said that current spot prices are creating demand destruction, which is contributing to weaker spot prices.

Other sources disagreed, saying that US ethylene remains at a cost advantage to overseas product and that consumption levels are steady.

With front-month September activity thin, October traded at 36.5 cents/lb on Friday, higher than any September deal done during the week.

However, the spot market was described as being in slight backwardation, with expectations that several cracker restarts in the end of September will improve supply.

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

By John Dietrich