US ethylene prices reached their lowest level since early
December in early April, rebounded slightly but couldn't
sustain the upward momentum and ended the month several cents
lower, according to a report released Thursday from
Ethylene prices on the US Gulf Coast, which were just under
61 cents/lb on April 1, fell to 54 cents on April 8, the lowest
level since December 10. They rebounded slightly in the latter
part of this month, reaching just over 57.5 cents on April 29,
but never recovered to the 60-cent or higher level seen in
March and the very beginning of April.
Contributing to the recent softening price trend in ethylene
was the subdued trade in polyethylene, ethylene's largest
plastic derivative. Weaker prices for crude oil and other
energy components left export buyers wondering if US prices for
polyethylene would move lower.
There were reports that traders were opting to source material
from Asia while waiting for US polyethylene prices to
become more workable for export.
"We saw ethylene test some support and resistance points
during April," said Kathy Hall, PetroChem Wire's chief editor.
"The month started out with some supply concerns, but the lack
of expected demand from downstream markets balanced those
concerns out. After finding what appeared to be a floor at 54
cents, ethylene steadily found its way back into the mid- to
upper 50s, where it ended the month."
Recent and ongoing plant outages have kept some suppliers'
polyethylene inventories snug. Still, due to lackluster demand,
polyethylene prices have been weakening slightly. Spot
polyethylene, which sold for 66.5 cents/lb at the beginning of
April, was selling around 65 cents in late April, the same
level seen in mid-March.
Meanwhile, prices for the raw materials used to make
ethylene were higher at the end of April than at the beginning
of the month. Ethane increased in price by 0.75 cents/gal, or
about 2.5%. Propane, another ethylene raw material, increased
in price by roughly 2.6 cents/lb or about 2.75%.