HOUSTON (ICIS)--US spot ethylene dropped to its lowest level since July as production was bolstered by new crackers and demand continued to be hampered by downstream outages.
US spot ethylene was assessed in the week ended Friday at 17.5-19.0 cents/lb ($386-419/tonne), down from 21.0-21.5 cents/lb in the previous week.
A new 1.5m tonne/year ethylene unit started up this week at the Chevron Phillips Chemical (CP Chem) Cedar Bayou complex in Baytown, Texas. This follows the start-up of a 1.5m tonne/year ethylene unit at Dow Chemical's complex in Freeport, Texas in September.
There have been few issues to hamper production in 2018, and most outages have been brief. However, one cracker was off line from late December until late February, and another cracker began a turnaround in early March.
Meanwhile, ethylene consumption has been hampered by production outages in downstream polyethylene (PE).
Force majeure declarations remain in place at two US Gulf PE plants, while several new PE plants have struggled to achieve full operating rates. By late February, 3m tonnes of PE capacity was estimated to be off line or disrupted.
Front-month ethylene spot prices reached a low this week of 17.5 cents/lb on Tuesday. The previous low point for front-month trades was 17.0 cents/lb on 10 July, when production had been bolstered by the restart of crackers after spring turnarounds while demand was hampered by record inventory levels for downstream PE.
Major US ethylene producers include Chevron Phillips Chemical, DowDuPont, ExxonMobil, INEOS Olefins & Polymers, LyondellBasell and Shell Chemical.