US front-month spot ethylene prices up on tightness

HOUSTON (ICIS)–US front-month spot ethylene prices closed Tuesday up 7.3% from the previous day, tracking continued tight supply and rising commodity prices.

March spot ethylene traded as high as 27.625 cents/lb ($609/tonne) on Tuesday, compared with the final trade a day ago at 25.750 cents/lb.

Midday, spot ethylene prices had climbed as high as 26.5 cents/lb, and continued rising on talk of a new cracker outage.

There was some discussion that Dow Chemical was having issues at one of its crackers in Taft, Louisiana, but the company said the crackers were operating normally.

There were also reports that DuPont was down recently at its cracker in Orange, Texas.

Spot prices for ethylene were above the 26 cents/lb range for delivery in south Texas, on the Williams System and in Louisiana, based on trades done Tuesday.

The market also remained in contango, with a March vs April trade reported done at 0.25 cents/lb in contango.

The uptrend is mostly supported by tightening supply from several planned turnarounds and at least one unexpected one.

Additionally, commodity prices are starting to climb on strong crude oil, boosting demand for several ethylene derivatives and supporting higher feedstock costs.