US ethylene spot hit highest weekly average since Jan 2013

22 August 2014 22:39 Source:ICIS News

HOUSTON (ICIS)--US ethylene spot prices hit their highest weekly average since January 2013 on Friday amid tight supply and low inventories.

Spot prices closed the week by trading four times at 68.0 cents/lb ($1,499/tonne), putting the week’s range at 66.5-68.0 cents/lb.

This was the highest average price for US spot ethylene since 67.5 cents/lb for the week ended 25 January 2013.

Spot prices have risen 10-12 cents/lb in the past two months on tighter-than-expected supply and low inventories.

With several US cracker turnarounds planned for the third quarter, sources do not expect the supply situation to ease.

However, high prices have already led to severe demand destruction in the styrene market, as two units have been shut down because of margin concerns.

With peak demand expected to hit the US polyethylene (PE) market, domestic demand for ethylene should stay steady.

This could lead to some of the planned cracker turnarounds being delayed, especially as high prices make inventory building expensive for buyers and producers.

By John Dietrich