US ethane prices sink to year low on mounting supplies, slack spot demand

Source: ICIS News

2019/03/22

HOUSTON (ICIS)--US ethane spot prices have sunk to the lowest assessment in 12 months, as mounting supply combined with slack demand for spot barrels from the steam cracker sector.

ICIS assessed spot ethane at 24.00-24.25 cents/gal FOB Mont Belvieu, Texas, representing the lowest assessment since 24.75-25.00 cents/gal on 16 March 2018.

Supply levels of ethane and other natural gas liquids (NGL) continue to lengthen while ethylene prices have traded under 15 cents/lb, giving little incentive for buyers to purchase on the spot market.

Those drivers are adding further downward pressure, according to market sources.

“We could go lower,” noted a US NGL broker.

Heavier liquids propane and butane are also facing downward pressure from those same factors driving down ethane. Namely, growing supplies of NGL from robust production zones like the Permian Basin, which are bringing in rising amounts of crude oil.

ICIS assessed propane at 63.25-63.75 cents/gal FOB Mont Belvieu, down 4 cents from last week, while normal butane shed 5 cents to 73.00-73.50 cents/gal FOB Mont Belvieu.