HOUSTON (ICIS)--US ethylene spot prices were wider with a similar midpoint to the prior week as a production issue offset downward pressure from ample supply and lower upstream ethane costs.
US ethylene spot prices were assessed on Friday at 14.500-15.125 cents/lb ($320-333/tonne), compared with 15.000 cents/lb in the previous week.
Ethylene spot prices remained low early in the week until a mid-week uptick as a power outage caused an unexpected shutdown of a US Gulf cracker. Later in the week, ethylene spot prices tracked declines in upstream ethane costs.
Ethylene supply remains lengthy as production has outpaced consumption despite the delay of some early-2019 cracker projects and the start-up of new derivative units.
Sasol's 1.5m tonne/year cracker at its Lake Charles Chemical Project (LCCP) in Louisiana had been expected to be online in February, but is now expected to start-up in July.
A new polyethylene (PE) unit started up at the Sasol facility in Louisiana. An ethylene glycol (EG) unit started up at a Lotte Chemical facility, also in Louisiana. Both units continue to ramp up.
Ethylene production in 2019 remains strong following the start-up of more than 3m tonnes/year of capacity in 2018.
Ethylene consumption has slowed in 2019, due to lower production rates for downstream polyethylene (PE) amid near record high inventories for some grades.
Spring cracker turnarounds may limit some ethylene supply overhang, but with further capacity start-ups scheduled in the second half of the year, expectations are for continued length through much of 2019.
An ethylene export terminal expected to start up in the fourth quarter could bring the market into a more balanced position. However, this also depends on the appetite for US ethylene exports as well as the appetite for domestic ethylene consumption in new derivative units.
Major US ethylene producers include Chevron Phillips Chemical, DowDuPont, ExxonMobil, INEOS Olefins & Polymers, LyondellBasell and Shell Chemical.