At 62 cents, ethane values are up roughly 6.50 cents/gallon since the beginning of the month. During that same time period, spot ethylene values have gain roughly 4 cents/lb and were hovering just near 40 cents/lb Friday morning.
October offers were heard Friday at 41 cents/lb MtB Wms while bids were at 38.50 cents/lb MtB Wms. November offers were flat to October while bids were discounted a quarter cent at 38.25 cents/lb MtB Wms. December was bid at 35.50 cents/lb MtB Wms with no corresponding offers seen at time of publication.
With ethane at 62 cents/gallon and spot ethylene estimated at 40 cents, steam cracker operator profits from ethane fell less than a penny this week and would be near 12.38 cents/lb. Margins from E/P mix were down roughly a half cent this week at 17.27 cents/lb.
Margins from propane remained in positive territory this week, gaining roughly 3 cents to be at 3.46 cents/lb, while butane remained in negative territory at -4.42 cents/lb. Margins from light naphtha posted sharp gains yet remained negative at -2.83 cents/lb.
A 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 low sulfur fuel oil) from cracking various light and heavy feedstocks (ethane, propane, butane, and an 80:20 E/P mix).
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