US January ethylene contracts settle at decrease

HOUSTON (ICIS)–US January ethylene contracts have settled for a majority of participants at a decrease of 1.25 cents/lb ($28/tonne) amid lower feedstock prices and an influx of new capacity.

The settlement puts January ethylene contracts at 25.75 cents/lb, down from 27.00 cents/lb in December.

Spot prices increased slightly during January, trading at 16.00-21.50 cents/lb from 15.75-21.50 cents/lb in December.

Production issues have temporarily backwardated the ethylene market to start the year. These short-term supply constraints have mitigated downward price pressure exerted by additional supply from the new Formosa Plastics Corp USA cracker and less-than-expected demand due to delayed start-ups of downstream polyethylene (PE) plants.

US ethylene contract prices typically settle at the start of the month.

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.