US ethylene margins down 9.9% on weaker spot prices

12 September 2016 21:43 Source:ICIS News

HOUSTON (ICIS)--US spot ethylene margins fell 9.9% week on week during the week ended 9 September, the ICIS margin report showed on Monday.

Spot ethylene margins on an ethane basis fell by 3.17 cents/lb ($70/tonne) to 28.89 cents/lb from 32.06 cents/lb.

Spot prices shed 3 cents/lb ($66/tonne) during the week, as a recent surge cooled off and buyers said demand destruction could start to hit the market.

However, sources also said that supply remains tight – especially after a cracker began a planned turnaround to close the week – so upward pressure will remain.

Margins were also thinned by higher feedstock ethane costs, which gained 0.21 cents/lb on an ethylene production basis.

Spot ethane co-product credits moved up 0.04 cents/lb despite weaker propylene prices.

Contract ethylene margins on an ethane basis fell 0.7% week on week to 23.39 cents/lb, with higher ethane costs outweighing higher co-product credits.

Front-month September ethylene was last heard offered at 39.75 cents/lb against no fresh bids.

By John Dietrich