Initial US May Ethylene Contracts Settle up 1.25 Cents/lb

Initial US ethylene contracts for May have settled at an increase of 1.25 cents/lb from April, market sources said on Thursday.

If fully accepted by the market, the settlement would put May contract prices at 33.25 cents/lb ($733/tonne), up from 32.00 cents/lb in April.

The increase was mostly due to higher cash costs and a slight increase in average spot prices.

Cash costs for May rose by about 2.0 cents/lb over April, while the average spot price for May ticked up by less than 0.5 cent/lb.

Front-month ethylene traded in May at 26.5-30.5 cents/lb, wider than trades at 27.5-30.0 in April.

Spot prices in the first half of the month were relatively steady just above or below 30 cents/lb, but began falling in the second half of the month

Supply was bolstered in mid-May by the restart of a US Gulf cracker after a turnaround. The DuPont olefins unit in Orange, Texas, had begun a turnaround on 20 April.

Demand during May has been weighed down by high polyethylene inventories and reduced operating rates in the styrene sector.

US ethylene contracts typically settle in the first days of the month for pricing in the previous month.

A full settlement is pending further confirmation from market participants.

Major US ethylene producers include ExxonMobil, INEOS, LyondellBasell and Shell Chemical.

Major US buyers include Occidental Chemical, Total and Westlake Chemical.