Sharp drop in ethylene spot prices in US, pull down ethylene contracts for April

Pressured by a sharp fall in US spot ethylene prices, April ethylene contracts slipped down by US$66/ton in USA amid largely steady production costs in April, as per ICIS. The settlement, which puts the monomer at 52.50 cents/lb, is the first drop for the monthly contract since July 2009. US spot ethylene ended April at 42-47.25 cents/lb, down on average by 36.5% from the first week of the month. Ethylene contracts are expected to drop again in May, pointing to continued pressure in the spot market. Spot ethylene for May delivery traded at 42-43 cents/lb, while June ethylene traded at 40 cents/lb. The downtrend in US ethylene was supply-driven, as monomer production was catching up with demand following a series of cracker outages in the first quarter.