US ethylene spot prices rose by 5% in the last three days, market sources said on Friday, citing growing fears that flooding will affect operations at crackers near the Mississippi river.
Ethylene for May traded at 70.50 cents/lb ($1,554/tonne, €1,088/tonne) on Friday, up from deals done at 67 cents/lb early in the week.
Market sources said the surge in spot prices stemmed from concerns that expected flooding next week could disrupt production at a number of crackers near the Mississippi river in Louisiana.
The crackers that could be affected include a 610,000 tonne/year Dow Chemical unit in St Charles; a 612,000 tonne/year Williams cracker in Geismar; and two Shell crackers in Norco, which have a combined capacity of 1.4m tonnes/year.
“The Mississippi river peaks next week at levels never seen by these crackers,” a market source said, adding that flooding could force the crackers to cut rates, if not shut down altogether.
The four crackers account for around 10% of total US ethylene capacity.