US spot ethylene prices continue to fall

10-Sep-10

US spot ethylene prices continued to slide, largely due to improved supply and associated outages that was replenished with Dow's restart at Freeport, Texas, in mid-August and Shell's restart at Deer Park, Texas in late August. Two September deals done at 33.75 cents/lb MtB Wms and Equ, as per Platts. Prices have fallen roughly 3.75 cents since the start of the month. Values have reached their lowest point since July 27, when spot was assessed at 32.50 cents/lb. Spot demand may also have weakened from downstream polyethylene and MEG turnarounds, Dow is expected to have 5 PE trains down in the US Gulf between now and H1 November. CP Chem and Ineos are under a one-month scheduled maintenance at the 318,000 tpa HDPE joint venture at Cedar Bayou, Texas. LyondellBasell is undergoing a turnaround at its 306,000 tpa MEG plant in Bayport, Texas. Dow also had a planned shutdown at its Taft 1 MEG plant in St Charles, Louisiana, when the company was to permanently shutter the ethylene glycol units in favor of only producing ethylene oxide. This conversion was expected to be completed by early 2011. With derivative demand weaker on these outages and improved monomer supply, spot ethylene was not expected to reverse course in the near term.