HOUSTON (ICIS)--US spot ethylene fell to its lowest point in nine years as production continues to be bolstered by new crackers and demand is hampered by downstream outages.
Front-month March ethylene traded at 16.25 cents/lb ($358/tonne) on Tuesday, the lowest level since the week ended 12 December 2008. During that time, the US economy was contracting amid the Great Recession caused by a financial crisis.
Ethylene spot prices had been falling since mid-January, following the resolution of the final Hurricane Harvey-related outages and the ramp up of a new Dow Chemical 1.5m tonne/year cracker, which had started up in September. The start-up of a new Chevron Phillips Chemical 1.5m tonne/year cracker in early March further softened ethylene sentiment.
As production has been strong in early 2018, consumption has been hampered by 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 offline or disrupted.
Major US ethylene producers include Chevron Phillips Chemical, DowDuPont, ExxonMobil, INEOS Olefins & Polymers, LyondellBasell and Shell Chemical.
US ethylene spot (10 year history)