US spot ethylene closes week on downtrend on cracker restarts

13 June 2014 23:21 Source:ICIS News

HOUSTON (ICIS)--US spot ethylene prices closed Friday slightly higher week over week but were trending down on several cracker restarts.

Spot prices started the week ended 13 June at 55.50 cents/lb ($1,224/tonne). Prices peaked mid-week at 55.75 cents/lb, which coincided with the market being in backwardation by 0.375 cents/lb, with several June versus July trades done there.

However, by mid-week several cracker restarts began, easing supply concerns that had been pushing spot ethylene higher.

DuPont began the restart process at its Orange cracker in Texas, which has an ethylene capacity of 680,000 tonnes/year, and ExxonMobil began restarting its Beaumont cracker in Texas, which has an ethylene capacity of 900,000 tonnes/year.

Additionally, a source said that LyondellBasell expects to restart its La Porte cracker in Texas in the second half of June with an additional 363,000 tonnes/year of ethylene capacity.

The easing of supply concerns pushed June spot ethylene down to 54.75 cents/lb on 12 June, based on two trades done there.

The lowering of June ethylene also narrowed the level of market backwardation, as a trade was done for June versus July ethylene at 0.25 cents/lb backwardated.

Sources said that the market is still expecting spot ethylene prices to soften going into the third quarter, as a trade was done at the close of the week for July versus August ethylene at 0.5 cents/lb backwardated.

By John Dietrich