US October ethylene contracts settle up 0.75 cent/lb

HOUSTON (ICIS)–US October ethylene contracts settled for the majority of the market on Monday at an increase of 0.75 cent/lb ($17/tonne), mostly driven by higher spot prices.

The settlement puts October ethylene contracts at 29.75 cents/lb ($656/tonne), as average spot prices rose and cracker cash costs were mostly flat. At least one participant did not settle October contracts at that price.

Average spot prices rose by about 1.50 cents/lb. Front-month ethylene traded in October at 20.00-29.00 cents/lb, compared with 19.25-27.00 cents/lb in September.

The spot price increased amid cracker outages for INEOS and ExxonMobil and a delayed startup for Sasol.

Meanwhile, average cracker cash costs were mostly flat at around 11 cents/lb.

Ethylene feedstocks spot prices finished October near 12-month lows.

The October settlement marks the fourth consecutive month that ethylene contracts have increased.

Contracts are at their highest level since October 2018, when they settled at 31.25 cents/lb.

US ethylene supplies are long as the country is in the midst of a large build-out in capacity.

Ethylene is a key petrochemical feedstock, used to make polyethylene (PE), ethylene glycol (EG) and polyvinyl chloride (PVC) among other products.

Major US ethylene producers include ExxonMobil, INEOS, LyondellBasell and Shell Chemical.

Major US buyers include Occidental Chemical and Westlake Chemical.

Image shows PE pellets. Photo by Al Greenwood