Feedstock ethane prices jumped Friday and August was heard done as high as 48.75 cents/gallon. The increase was driven by stronger buy interest and the fact Dow stepped out of the market as a seller following the startup of its LHC 7 olefins unit at Freeport, Texas.
Sellers were absent early Friday however buyers were seen bidding August at 35.25 cents/lb MtB Wms while September was bid at 35.50 cents/lb MtB Wms. Sellers later emerged with higher offers and ultimately a September trade was heard done at 36 cents/lb MtB Wms. Additionally a formula based deal was done for September at C2 + 15 cents/lb.
After the deal, September was heard bid at 36.50 cents/lb MtB Wms. On the Equistar system, September was bid at 35.75 cents/lb against offers at 37.50 cents/lb.
Sellers were likely to continue offering higher in an effort to retain margins in the face of rising feedstock costs. With spot ethylene near 36 cents/lb and ethane and E/P mix at 48.75 and 40.25 cents/gallon respectively, steam cracker operators were seeing margins from E/P mix estimated at 17.20 cents/lb. Margins from ethane were slightly lower at 13.54 cents/lb, according to Platts estimates.
China Chemical Weekly: http://news.chemnet.com/en/detail-1403616.html
