U.S. ethylene margins fall 13% to US$0.3031/lb. in week ending June 24 after spot prices plummet on softening demand; prices likely to stay on downward trajectory in near-term
June 29, 2011
– Last week, margins for U.S. ethylene declined by 13% after spot prices plunged on softening demand, ICIS news reported June 27. Margins for ethane-derived ethylene dropped to US$0.3031 per pound from $0.3496/lb. the previous week.
The average spot price in the week ended June 24 retreated 8% from slackening demand and a fall in derivative prices, according to ICIS market sources. June ethylene was traded at $0.5750-$0.6300/lb. versus $0.6525-$0.6600/lb. a week ago, while July ethylene was $0.5650-$0.6300/lb. versus $0.6425-$0.6550/lb. in the prior week.
The fall in spot prices were attributed to softer demand for polyethylene, with several PE suppliers reportedly opting to sell ethylene instead of PE, according to sources ICIS spoke with. Declines in energy prices and feedstock costs exacerbated pricing problems for ethylene.
The monomer is likely to continue its downward trajectory in the near-term, added ICIS. Sources told the news service that Ineos Olefins & Polymers USA’s PE plant in La Porte, Texas, was offline and was likely to remain so until July 1, while LyondellBasell Industries’ OP-2 Channelview, Texas, 873,000/year cracker was reportedly coming back online following about a two-month maintenance
The primary source for this article is ICIS news, Surrey, England, June 27, 2011.