US steam cracker margins likely to dip amid declining spot ethylene prices

According to industry sources, the spot market impact of January's plant outages appears to be weakening as turnaround completion deadlines are approaching -- Westlake Chemical is expecting to complete the expansion of its Geismar, Louisiana, Petro 2 steam cracker in late February/early March. Late February was also cited as the targeted date of completion for Huntsman's Port Neches, Texas, steam cracker, as per Platts. Ethane-based margins were assessed Friday at 43.84 cents/lb, down 0.86 cent/lb since the February 1 assessment. Ethane/propane mix-based margins were estimated at 47.26 cents/lb, 1.10 cents/lb lower from 48.36 cents/lb from the week prior. US Gulf Coast purity ethane is down 1 cent/gal since January 4, assessed Friday at 21.75 cents/gal. Gulf Coast E/P mix also declined 1 cent/gal for the week, assessed Friday at 21.50 cents/gal. Although E/P mix and ethane are typically the preferred feedstocks of US olefins producers, propane has shown to be preferred feedstock for ethylene production -- propane was the one feedstock that showed an increase week on week, assessed at 55.35 cents/lb Friday, up 0.44 cent from the February 1 assessment of 54.91 cents/lb. Non-LST Mt Belvieu propane was down 3.75 cents for the week, assessed at 84.25 cents/gal on Friday. The US ethylene spot price ended the week down 1.75 cents/lb, assessed Friday at 62-62.50 cents/lb FD USG.
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