HOUSTON (ICIS)--US October ethylene contracts have settled at a decrease of 0.5 cent/lb, market sources said on Wednesday.Photo by Mode/REX/Shutterstock
The settlement puts October contact prices at 34.75 cents/lb ($766/tonne), down from 35.25 cents/lb in September.
The decline tracks lower spot prices in October as most hurricane-related outages have resolved.
Hurricane Harvey had caused outages and disruptions for production starting in late August, with many units returning to normal operating conditions in September. However, some outages or reduced rates continued into October, including an outage at the LyondellBasell complex in La Porte, Texas, as well as the Chevron Phillips Chemical (CP Chem) complex in Cedar Bayou, Texas.
The La Porte ethylene unit began restarting last week, while the Cedar Bayou unit outage could continue into mid-November.
Disruptions from Harvey also delayed some upcoming projects, including a new CP Chem cracker in Cedar Bayou and a new ExxonMobil cracker in Baytown, Texas. However, a new cracker started up at DowDuPont's complex in Freeport, Texas in September.
Amid the outages and delays, ethylene prices climbed to a peak of 31.50-32.25 cents/lb for the week ended 22 September. As units restarted and as supply recovered, ethylene prices have trended lower.
Front-month ethylene traded at 26.50-30.00 cents/lb in October, compared to 29.50-32.25 cents/lb in September.
However, still-high costs limited the impact of lower spot prices.
Prices for ethane, the main feedstock for ethylene production, have eased from the high 20s cents/gal in late September, but the average price has been higher in October. Prices for propane, butane and other ethylene feedstocks also are higher in October.
US ethylene contract prices typically settle at the start of the month for the prior month.
Major US ethylene producers include ExxonMobil, INEOS, LyondellBasell and Shell Chemical.
Major US buyers include Occidental Chemical and Westlake Chemical.