US ethane-based contract PE margins decline on higher feedstock costs

HOUSTON (ICIS)–US integrated contract margins based on ethane for polyethylene (PE) declined for the week ended 10 March because of higher ethane costs, despite higher coproduct values, the ICIS report showed on Monday.

US integrated contract margins based on ethane fell by 0.2% for low density polyethylene (LDPE) and for high density polyethylene (HDPE). Ethane costs rose by 1.7%, while contract coproduct values were up by 2.2%.

US integrated LDPE and HDPE spot margins based on ethane were down by 0.2% and 1.5%, respectively, despite the 3.2% increase for ethane spot cracker coproduct values.

Integrated contract and spot margins based on naphtha rose 10% and 12% for LDPE and HDPE, respectively, as naphtha feedstock costs fell by 9.3%.

Margins were based on the February ethylene and PE contracts and are subject to revision following the March settlement of ethylene and PE contracts.

Image above: Polyethylene is used to make plastic bags such as these. Source: Dinendra Haria/REX/Shutterstock