PetroChem Wire: April NYMEX Ethylene Prices Rise

Mar 26, 2010, 09:25 ET from PetroChem Wire

HOUSTON, March 26 /PRNewswire/ -- U.S. ethylene prices continued to rise during March, with the April New York Mercantile Exchange's (NYMEX) cleared ethylene settling and expiring at $0.615 per pound. The contract, which began trading in July 2009, settled for March last month at $0.51 per pound. Ethylene trades in 100,000-pound lots per contract on the NYMEX's Clearport system.

In the overall cash markets, April ethylene traded up from $0.55 cents to $0.61 per pound since the end of February, according to PetroChem Wire (PCW), a daily U.S. petrochemical industry newsletter. PCW's cash market assessments are used to settle the cleared NYMEX contracts. Typical ethylene deals are a minimum of 3 million to 5 million pounds in size, or 30 to 50 lots per trade. So far in March, more than 200 million pounds of ethylene have traded in the spot market.

"Spot ethylene prices reached levels in March 2010 not seen since July 2008, when crude oil was above $140 per barrel," said Kathy Hall, executive editor of PCW. "Ethylene prices continued to be driven by supply concerns, and have disconnected from its feedstock markets such as ethane. However, these higher ethylene prices are inspiring price increase initiatives in downstream markets, notably polyethylene."

Maximum steam cracker operating rates in the U.S. Gulf were 90% during March. Maximum operating rates were at 87% for steam crackers in Texas and 99% in Louisiana, a combined rate for the region of 90%.

By comparison, steam cracker operating rates a year ago were around 75%, and spot ethylene was trading at $0.25 per pound.

Steam crackers in Texas and Louisiana produce more than 95% of the country's ethylene. The 26 steam crackers in Texas and 10 in Louisiana produce a combined total of about 150 million pounds of ethylene each day.

Ethylene is a building block chemical used in the production of plastic resins and a variety of solvent chemicals, all used in major consumer manufacturing products.

For more information on the chemical benchmark of ethylene, visit

The PetroChem Wire is a daily newsletter serving the petrochemical industry. It counts every major petrochemical and refining company among its subscribers, as well as many major manufacturing concerns, global conglomerates, industry consultants, equity analysts and government agencies.

SOURCE PetroChem Wire