HOUSTON (ICIS)--US ethylene spot prices were volatile this week, but values slumped overall because of bearish sentiment stemming from expectations of improving supply, as well as from a fire in a derivative market.
The week actually began with front-month October ethylene spot prices continuing the previous week’s uptrend. The market had been reacting to talk of various restart dates for a cracker turnaround and expansion project in Corpus Christi, Texas, that has been delayed twice. Still, sources said that 32 cents/lb was too low of a spot price to start October, and values began inching up once again.
Sentiment became bullish on Tuesday as a force majeure was lifted in the downstream polyethylene (PE) market. A linear low density polyethylene (LLDPE) producer announced the cessation of a force majeure that was declared in mid-May on its sites in La Porte, Texas, and Morris, Illinois.
Expectations of an increase in ethylene consumption led spot prices to jump up to 36 cents/lb on Tuesday. Still, some sources said that this was too much of a price rise, questioning whether the increase was truly demand driven or a result of speculative trading.
Spot prices began slipping once again, but values plunged by 11% on Thursday as news emerged of a fire at a styrene plant in Lake Charles, Louisiana, turning sentiment bearish.
Sources said that Thursday’s spot price drop to 30.875 cents/lb was too much of a decrease, given that October ethylene had traded earlier in the day at 32 cents/lb. Nevertheless, prices continued slipping as the news permeated the market, trading below the 30 cent/lb level on Friday.
US front-month October ethylene spot prices for the week were assessed on Friday at 29.75-36.00 cents/lb, wider compared with 32.00-34.75 cents/lb in the previous week.
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