US spot ethylene drops to 53 month low amid possible restart by two major producers

12-Feb-15

US spot ethylene dropped to a 53 month low following talks of restarts at two major producers - to be assessed at 34.5-35 cents/lb FD USG for February delivery, while March assessment was down 0.75 cent at 35-35.5 cents/lb FD USG following market, as per Platts. The dip in pricing followed the long-anticipated morning announcement from Williams Partners to resume ethylene sales from its expanded Geismar, Louisiana, olefins plant after successful commissioning of the rebuilt and expanded projects- The expanded ethylene capacity of the Geismar site is 885,000 mtpa. Additionally, Chevron Phillips is restarting a steam cracker at its Cedar Bayou, Texas, plant, as per a company filing with state regulators. A market source estimated the start up completion in 7-10 days. Three Texas-based producers are currently undergoing turnarounds that are to be completed in February- ExxonMobil in Beaumont (820,000 m tpa capacity), Dow Chemical's LHC#8 in Freeport (1 million m tpa) and Shell OP3 in Deer Park (834,000 m tpa, running at reduced rates) -- which could lead to lower spot prices and contract prices in February.