NEGOTIATOR’S TAKE: Ethylene rise will exert upwards pressure on Polyethylene prices.
March 2016 – Houston
U.S. front-month spot ethylene closed the week ended Friday at its highest since August 2015 on tight supply. Early in the week, spot prices for March ethylene spiked at 27.625 cents/lb ($609/tonne) after news of an unplanned cracker shutdown hit the market.
Ethylene spot market trending higher on tighter supply
Mid-week, spot prices started to slide slightly as sources said operations at the cracker were restored. On Friday, front-month March ethylene traded at 27.250 cents/lb and 27.375 cents/lb. The ethylene spot market has been trending higher on tighter supply ahead of a heavy cracker turnaround season in April and May.
Global Crude prices a factor
Additionally, higher global crude oil prices are likely to push up prices for overseas ethylene and derivatives. U.S. ethylene producers would likely see prices increase as well, but could switch to cheaper ethane and boost margins. Demand for ethylene remained mostly steady, sources said, although seasonal factors are starting to boost several downstream markets, including construction.