US ethylene margins soften slightly on lower spot prices

01 October 2012 18:35 Source:ICIS News

HOUSTON (ICIS)--US ethylene margins fell by 0.5% in the fourth week of September, pressured by a small drop in ethylene spot prices, the ICIS margin report showed on Monday.

Ethylene margins were assessed at 48.90 cents/lb ($1,078/tonne, €841/tonne), using ethane as a feedstock, down from 49.16 cents/lb a week earlier.

The reduction followed a drop in ethylene spot prices, which last week traded at 58.500 cents/lb on average for September delivery, down by 0.5% from 58.812 cents/lb in the third week of September.

Although spot prices fell, the drop last week was limited by an unplanned cracker shutdown.

September ethylene traded at 57 cents/lb early in the week before jumping to 60 cents/lb a day later amid news that BASF TOTAL was having another outage at its Port Arthur cracker in Texas.

The shutdown was caused by a disruption at a major compressor on 25 September. The 934,000 tonne/year cracker was restarted on 27 September, a spokesperson said.

The same cracker went down on 18 September as a result of an instrument failure at a compressor, but production was restored two days later, according to the company.

The cracker is a joint venture between BASF and Total.

Ethylene for October delivery was offered at 61 cents/lb on Monday against a 57.50 cent/lb bid. No deals were heard.

Ethane prices moved up to 32.25 cents/gal in early trading, tracking higher prices in other energy commodities.

The feedstock averaged 30.875 cents/gal last week, mostly flat with 30.950 cents/gal a week earlier.

($1 = €0.78)

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By William Lemos