Lifted by higher ethylene spot prices and softer production costs margins, ethylene margins in USA rose by 2.7% this week, as per ICIS. Ethylene margins were at 34.27 cents/lb (US$756/ton) for the week ended 26 August, using ethane as a feedstock. US margins rose as ethylene spot prices climbed by 1% last week on inventory building ahead of upcoming cracker turnarounds. Ethylene for August traded at 62.50–63.25 cents/lb, up from 61.75–62.75 cents/lb during the week that ended on 19 August. The increase in spot prices was driven by anticipated supply tightness because of scheduled maintenance at four US crackers in September and October.
Two crackers expected to go off line on 1 September, include ExxonMobil's 1 mln tpa Baton Rouge unit in Louisiana for 45 days. Formosa will also shut down a 816,000 tpa Point Comfort cracker in Texas on 1 September for up to 40 days. Shell is expected to follow with a 45 day turnaround on 1 October at its 835,000 tpa Deer Park plant in Texas, while Dow Chemical will shut down its 610,000 tpa St Charles cracker in Louisiana on 10 October for 30 days. Formosa confirmed its turnaround, but the other three producers declined to comment on their forthcoming shutdowns.