Rising US ethylene prices have given a significant bump to LyondellBasell’s olefins earnings, but continue to squeeze polyethylene (PE) margins as per ICIS. For most of 2010, ethylene prices have surged, peaking with trades at 70 cents/lb or more over the past two days. “The trend between rising ethylene margins and PE squeeze is quite clear,” Gallogly said. “While there are a number of price increases in the works, there is definitely some compression on margins.”
US PE, the company’s strength in H2-2009, based largely on export opportunities to Asia – trended down, partially on margins and also on a volume reduction of 5% compared with December. Price increases in US PE should in time catch up with ethylene on a proportional basis. This has been offset by strength in polypropylene (PP), where results improved by US$20 mln in January as industry demand increased.