US spot ethylene lower on news of cracker restart

12-Jan-15

US spot ethylene prices ended the previous week lower by an average of 4.5% from the close of 2014, as per ICIS. Spot prices fell to start the week before a small rebound mid-week, ending the week in the 36-38 cent/lb (US$794-838/ton). The decline came as news of a planned cracker outage was balanced by news of a restart, with market players also expecting another cracker to resume operations soon. The cracker operating changes would lead to an increase of more than 3,000 tons/day of production. Spot prices are also facing downward pressure as continuing declines in global oil and energy markets have led buyers to the sidelines. This has led ethylene buyers, especially in the polymers segments, to wait and see before building inventories. US buyers are also facing increased competition from overseas polymers producers in the global export market, as the nation's cost advantage has shrunk. Sources said they expect that demand will start to improve domestically, especially as derivative contracts fall, but that improved supply and global energy markets will outweigh improved demand.