US February ethylene contracts settle at decrease amid ample supply

HOUSTON (ICIS)–US February ethylene contracts settled for a majority of participants at a decrease of 1.75 cents/lb ($39/tonne), tracking lower spot as cracker start-ups and expansions in upstream fractionation capacity continue to boost already ample supply.

The settlement puts February ethylene contracts at 24.00 cents/lb, down from 25.75 cents/lb in January.

Spot prices fell steadily throughout February, ranging from 12.00-17.50 cents/lb, down from 16.00-21.50 cents/lb in January.

Lower-than-expected demand due to delayed polyethylene (PE) and polyvinyl chloride (PVC) start-ups and subdued exports to Asia as a result of the coronavirus (Covid-19) have also pressured prices.

New cracker start-ups in Q1 have included Shintech’s Plaquemine cracker in Louisiana, Formosa Plastics Corp USA’s Point Comfort cracker in Texas and Indorama’s Westlake cracker in Louisiana.

These new crackers have added around 2m tonnes/year of ethylene capacity to a market that is already long.

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 Chevron Phillips Chemical, DowDuPont, ExxonMobil, INEOS Olefins & Polymers, LyondellBasell and Shell Chemical.