US LDPE margins fall by 0.51% on higher feedstock costs

09 June 2014 16:00 Source:ICIS News

HOUSTON (ICIS)--US polyethylene (PE) margins for low density polyethylene (LDPE) fell by 0.51%, following a rise in feedstock ethane costs, the ICIS margin report showed on Monday.

Integrated domestic PE margins were assessed at 70.49 cents/lb ($1,554/tonne) for LDPE and 61.24 cents/lb for high density polyethylene (HDPE) blow moulding in the week that ended on 6 June. That represents a 0.36 cent/lb decrease on average for LDPE and a 0.35 cent/lb decrease for HDPE, from a week earlier, using ethane as a feedstock.

Ethane costs for the week ending on 6 June rose by 1.1%, while co-product credits fell by 4.1%. There was a 0.33 cents/gal hike in ethane prices. The fall in co-product credits was the result of the lower June propylene contract settlement and lower C4 values.

Co-product credits are the price at which products such as propylene, butadiene (BD) and benzene, which are made along with ethylene in the cracking process, can be sold.

May contract-based standalone margins were revised downwards following the 0.25 cents/lb higher settlement of the May ethylene contract price. Average May standalone PE margins were 0.14 cents/lb lower than in April but more than 8 cents/lb stronger than May 2013.

By Michelle Klump