HOUSTON (ICIS)--US spot ethylene fell to its lowest point since July as production is bolstered by new crackers and as demand is hampered by downstream outages.
Front-month March ethylene traded at 19 cents/lb ($419/tonne) on Tuesday, the lowest level since the week ended 21 July, when front-month trades were 18.5-21.0 cents/lb.
Ethylene spot prices have been falling since mid-January, following resolution of the final outages related to Hurricane Harvey. There have been few long-term production issues in 2018, although one cracker was offline from late December until late February and another cracker began a turnaround in early March.
However, production levels have been good and have been further bolstered by the start-up of two new crackers. A Dow Chemical unit started up in September and a Chevron Phillips Chemical (CP Chem) unit started up earlier this week.
Meanwhile, ethylene consumption has been hampered by production outages in downstream polyethylene (PE).
Force majeure declarations remain in place at two US Gulf PE plants, while several new PE plants have struggled to achieve full operating rates. By late February, 3m tonnes of PE capacity was estimated to be offline or disrupted.
When ethylene spot prices last fell below 20 cents/lb in July, production had been bolstered by the restart of crackers after spring turnarounds while demand was hampered by record inventory levels for downstream PE.
Major US ethylene producers include Chevron Phillips Chemical, DowDuPont, ExxonMobil, INEOS Olefins & Polymers, LyondellBasell and Shell Chemical.