US ethylene prices rise on potential demand ahead of planned turnarounds

US ethylene spot prices rose this week on potential demand related to scheduled cracker maintenance over the next three months, as per ICIS. Ethylene for July traded as high as 61.50 cents/lb (US$1356/ton) this week, rising on average by 7% from deals done a week earlier. A series of turnarounds, coming up over the next few months, is pointed as the likely reason behind the uptrend. Among the shutdowns is Formosa's Point Comfort cracker 2 in Texas with 816,000 ethylene capacity, to go down on 1 September for 35–40 days. According to sources, ExxonMobil will shut down its 1 mln tpa Baton Rouge cracker in Louisiana on 1 September for a 45-day turnaround. Shell will follow with a shutdown at its Deer Park cracker in Texas on 1 October for 45 days. The company has 835,000 tpa of capacity at the site. Dow Chemical's 610,000 tpa St Charles cracker in Louisiana, which will go down on 10 October for 30 days. ExxonMobil is also said to be planning a 45-day turnaround at its 1.2 mln tpa Baytown cracker in Texas, but the unit is not expected to go down until 1 January 2012. The potential for more ethylene price increases is real, market sources said, since lost production from the turnarounds could reach 760 mln lb (345,000 tons), or 1.3% of US capacity, based on the length and the size of the crackers involved.
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