HOUSTON (ICIS)--US ethane spot prices plunged below 40 cents/gal on Thursday, down over 7 cents from Wednesday as the market sell-off hit the natural gas liquids (NGL) sector.
Ethane for October delivery was heard trading down to 35.00 cents/gal FOB (free on board) Mont Belvieu, Texas, in the morning before recovering to around 37.50 cents/gal by the afternoon, sources said.
ICIS last assessed ethane at 49.25 cents/gal on 5 October.
A trader who normally buys big volumes was heard selling, an NGL broker said.
Ethane has shed nearly half of its value in under a month, as the sell-off in physical ethane continued from mid-September when barrels at the market hub hit as high as 62.00 cents/gal.
Much of the downturn can be attributed to steam cracker outages in the region, consultant Peter Fasullo of En*Vantage said, adding that once those plants come back online and new plants start up, ethane can get very tight again.
“I see ethane being oversold [and the market] still has very tight fractionation capacity so that won’t get resolved anytime soon,” Fasullo said.
Propane prices also plunged, trading down to 97.00 cents/gal FOB Mont Belvieu, Texas, down from 104.00 cents/gal on 5 October, according to ICIS data.
NGLs are important to the petrochemical industry because they are the predominant feedstock for crackers in the US.