US spot ethylene reached a 29 month high on Friday, assessed at 71.75-72.25 cents/lb FD USG, amid tight supply arising from ongoing production outages, as per market sources in Platts. The assessment is at its highest level since the April 9, 2012. September was heard offered at 73.5-74 cents/lb Mont Belvieu Williams pipeline basis, against bids heard at 71 cents/lb MtB Wms. October was heard offered at 71-74 cents/lb MtB Wms, against bids heard at 68 cents/lb MtB Wms.
The price hike was initiated on Monday, on talks of f ExxonMobil starting a five to six-week turnaround at its Baytown Olefins Plant in Baytown, Texas. "Planned maintenance is expected to continue for the next several weeks and we expect to meet our contractual commitments," a source said. ExxonMobil's Baytown Olefins Plant has ethylene capacity of 960,000 mt/year. Supply was also constrained from a delayed start up of Williams Olefins' Geismar, Louisiana, steam cracker, which was shut after an explosion in June 2013. Start up was to be completed in April but is currently postponed until October. Supply was also constrained by a fire at Chevron Phillips' Port Arthur, Texas, ethylene plant in early July. The three plants account for over 9% of US production capacity and are set to restart in the fourth quarter, according to sources.
The current spot levels are pushing some producers to delay turnarounds until next year. Formosa Plastics postponed its scheduled turnaround in Point Comfort, Texas, until late October, company sources said, while Dow Chemical and Chevron Phillips are postponing scheduled turnarounds until 2015 at their respective plants in St. Charles, Louisiana, and Cedar Bayou, Texas.
15-Sep-14 
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