US ethylene margins fall on lower spot, higher feedstock

HOUSTON (ICIS)–US spot margins for ethane-based ethylene fell by 6.4% in the week ending on 30 September, marking the second consecutive week of decreases on the back of lower spot prices and higher feedstock costs.

Ethylene spot prices fell by 3.5% week on week as concerns over supply tightness continued to ease. Prices had surged in mid-September on news that an ongoing turnaround and expansion project had been extended further, and as two more crackers shut down for planned maintenance. However, supply is improving on the restart of another cracker after a turnaround, and as participants rebuild inventories.

Spot ethylene margins also fell as a 6.9% increase in feedstock ethane costs outweighed a 1.4% increase in cracker co-product credits.

Despite spot margins decreasing in the last three of four weeks, the monthly average for September remains 11% above August, and 84% above June when the overall uptrend began.

On contract basis, ethane-based ethylene margins fell by 2.5% in the week ending on 30 September, as the feedstock ethane cost increase outweighed the 3.4% increase in cracker co-product credits.

September ethylene contract margins have been revised, following last week’s higher settlement of September propylene contracts. Contract margins continue to reflect the August contract price of ethylene, pending the September contract settlement.

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