US PE margins decline on higher feedstock costs

20 March 2017 17:10 Source:ICIS News

Source: Gene Blevins/REX/ShutterstockHOUSTON (ICIS)--US polyethylene (PE) margins declined across the board during the week ended 17 March because of higher costs for ethane and naphtha feedstocks, the ICIS margin report showed on Monday.

US integrated contract margins based on ethane fell by 0.3% for low-density polyethylene (LDPE) and for high-density polyethylene (HDPE) despite a 1.8% increase in contract co-product values, as ethane costs rose by 2.1%.

US integrated LDPE and HDPE spot margins based on ethane were both down by 0.4%, despite a 2.7% increase in spot cracker co-product values.

Integrated contract and spot margins based on naphtha fell for LDPE and HDPE as naphtha feedstock costs rose by 2.8%.

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

Above image: These balls are made of PE. Source: Gene Blevins/REX/Shutterstock

By Ron Coifman