Outages trigger spike in European ethylene spot prices to 2013 highs

03-Sep-13

A combination of planned and unplanned outages sent ethylene spot prices to a 2013 high of Eur1180-1185/mt (US$1560-15667/mt) FD NWE Friday, soaring by Eur98/mt on the week, as per Platts. Volatility of feedstocks added to upward pressure on spot prices. However, choppy oil prices delayed the convergence of buyers and seller in the September contract market. A monthly contract price is fully settled when two independent sellers agree the same price with two independent buyers. Buyers and sellers have so far been unable to agree the increase for the September CP. The August ethylene CP was settled on July 31 at Eur1,210/mt FD NEW- when naphtha was assessed at US$869/mt CIF NWE. It was assessed on Friday at US$953.25/mt CIF NWE. The bullish stance of producers was compounded by a "marginal" increase in the butadiene contract price. The September contract price for European butadiene was fully settled Friday at Eur775/mt FD Northwest Europe, up Eur25/mt on the August contract price, according to industry sources. "Ethylene is already expensive and this will not help," an ethylene buyer said. Propylene September CP also remains unsettled. An unplanned stoppage at Dow's Tarragona cracker in Spain for the first half of September has exacerbated supply tightness in Europe. A heavy turnaround season in Europe began at the end of August and has already led to snug supplies.