U.S. ethylene prices drop seven percent in February after January highs

HOUSTON, March 4, 2013 /PRNewswire/ -- Prices for ethylene, the raw material for many consumer goods made from plastic, declined in early February from the eight-month peak reached in late January and then plateaued signaling a potential improvement in profit margins for manufacturers heading into Spring, according to the chemical industry report, PetroChem Wire (PCW).

U.S. ethylene prices fell from nearly 68 cents per pound on January 28 to 61.75 cents by February 12 before rebounding slightly to end the month at 62.75 cents per pound, a 7% overall decline.  At the same time, costs to produce ethylene from ethane rose from 7.5 cents per pound to 8.5 cents per pound, and propane-based costs rose from 2 cents per pound to 4.5 cents per pound.

Ethylene price stability in recent weeks following the earlier, more dramatic price movements, suggests a more balanced supply/demand picture for the chemical. "Overall, February was a stable month for ethylene and many of its downstream markets," said Kathy Hall, PCW's executive editor. "During January, some unexpected plant outages contributed to prices rising. Once those plants came back online, prices stabilized."

The 68-cent ethylene price seen in late January was the highest level since early May 2012 and was the pinnacle of an uninterrupted price increase that began in early December. Ethylene prices jumped by nearly 30 percent, or 18 cents per pound, between early December and late January.

This steady price increase reflected strong domestic and export demand and tighter domestic supply for polyethylene, ethylene's largest plastic derivative.  The U.S. and Canada recorded the highest volume of polyethylene exports in three years in December.

The PetroChem Wire is a daily newsletter serving the petrochemical industry. It counts every major petrochemical and refining company among its readers, as well as many major manufacturing concerns, global conglomerates, industry consultants, equity analysts and government agencies. It also produces maps of the ethylene plant and pipeline system. For more information, see www.petrochemwire.com

SOURCE PetroChem Wire



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