Prices have fallen roughly 3.75 cents since the start of the month.Values were at their lowest point since July 27, when spot was assessed at 32.50 cents/lb.
The declines were due largely to improved supply and associated outages downstream, participants said. Supply was replenished in recent weeks following Dow's restart at Freeport, Texas, in mid-August and Shell's restart at Deer Park, Texas, late last month.
Spot demand may also have weakened from downstream polyethylene and MEG turnarounds, sources commented. Dow was expected to have 5 PE trains down in the US Gulf between now and H1 November, a source familiar with operations said. Specific details on which trains would be down and the timing were not immediately available. As well, CP Chem and Ineos were under a one-month scheduled maintenance at its 318,000 mt/year HDPE joint venture at Cedar Bayou, Texas.
In MEG, LyondellBasell was undergoing a turnaround at its 306,000/mt year 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, sources said. Upstream, spot ethane was fairly robust Wednesday with the last trade heard done at 43.375 cents/gallon.
As ethane held relatively steady and ethylene fell, producers saw profits crimp even further. Margins from both ethane and propane fell roughly a penny from Tuesday and were at 12.12 and 15.51 cents/lb, respectively, according to Platts estimates.
The Platts estimate of cracker margins measures the relative gain and loss in cents/lb of ethylene produced from cracking several feedstocks. The estimate uses the current spot price and yields of the various ethylene cracker products (ethylene, propylene, butadiene, benzene, toluene, xylene,
fuel oil and LSFO) from cracking various light and heavy feedstocks (ethane, propane, butane, and an 80:20 E/P mix).
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
