Initial US July ethylene contracts settle down 1.25 cents/lb

02 August 2017 18:45 Source:ICIS News

arrow downHOUSTON (ICIS)--Initial US ethylene contracts for July have settled at a decrease of 1.25 cents/lb from June, market sources said on Wednesday, although the agreement is not market-wide.

The decrease puts July contract prices at 29.25 cents/lb ($645/tonne), down 4.1% from 30.50 cents/lb in June.

However, the settlement is not expected to be market-wide, with at least one participant that has not agreed to the July price. The June contract settlement also was not market-wide.

The decline for initial July contracts was due to lower spot prices, but was offset by higher cash costs.

Front-month trades in July ranged 17.0-21.0 cents/lb, compared to 23.0-28.0 cents/lb in June.

Average spot prices were down by about 4 cents/lb, market sources said.

Strong production and recent ethylene capacity expansions have kept downward pressure on spot prices in recent weeks.

However, average cash costs rose by about 2 cents/lb month on month, which limited the downward pressure from lower spot prices market sources said.

A full settlement is pending further confirmation from market participants.

Major US ethylene producers include ExxonMobil, INEOS, LyondellBasell and Shell Chemical.

Major US buyers include Occidental Chemical and Westlake Chemical.

By Jessie Waldheim