May ethylene dips to seven-month low in USA

02-Jun-12
US prices for ethylene reached a seven-month low in May, dropping below 50 cents per lb, as per PetroChem Wire. As per PetroChem Wire's chief editor. "Supply availability has been increasing as various ethylene plants complete their maintenance turnarounds. Also, the U.S. ethylene price had reached a level that kept downstream markets like polyethylene from being competitive in the global marketplace. Without export market options, inventories built in those markets which backed up into the ethylene market." Reduced ethylene production due to plant maintenance closures supported the ethylene market earlier in Q2-2012. Ethylene peaked at just over 75 cents per lb at the beginning of April. On May 31 it traded at 46.5 cents per lb. The margins for ethylene producers are better now than they were last October when ethylene also traded around 47 cents per lb because ethane is cheaper. But the differential between the chemical and the raw material used to make the chemical is not as wide as it was a month ago because the decline in the ethylene price has outpaced the drop in the cost of ethane. That differential was 49 cents per lb at the end of April and is now 36 cents per lb. In October it was about 20 cents. A weaker market for polyethylene has contributed to the drop in ethylene. Sluggish demand for ethylene glycol, which is used to produce PET resin and also is used to make antifreeze, is also a factor in ethylene's decline.
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