Ethylene prices continue to rise on cracker outages
US ethylene spot prices were still rising in the week ended 29 July on production issues at Texas crackers and the likelihood of increased demand in the coming months as a result of scheduled cracker maintenance.
Ethylene for July traded at 62.00-63.50 cents/lb DEL, compared with 59.50-61.50 cents/lb in the previous week. The bid/offer range at the end of the week was 62.50-63.50 cents/lb.
August ethylene traded at 62.00-63.50 cents/lb, up from 59.00-61.00 cents/lb in the previous week. A September ethylene deal was done at 62.00 cents/lb.
Production News
The Flint Hills Resources (FHR) light olefins unit (LOU) at Port Arthur, Texas, may start up during the weekend of 30-31 July, market sources said on 28 July.
One source said the unit might remain down through the weekend, but another understood that a restart was planned for the weekend, with full operating rates possible by 1 August.
A spokesperson for FHR could not be reached for comment.
US-based FHR’s LOU shut down over the weekend of 23-24 July because of steam loss from a third-party supplier, according to a filing with state regulators. The third-party supplier in question was Motiva, one source said.
The Port Arthur facility has an ethylene capacity of 621,100 tonnes/year, and a propylene capacity of 365,000 tonnes/year.
DuPont’s Orange cracker in Texas is still operating at reduced rates, market sources said on 29 July. The cracker was shut down on 15 July after a lightning strike, the company said in a public filing.
Although the cracker was subsequently restarted, it continues to experience technical problems, sources said. The cracker may return to full operations next week, according to one source.
A DuPont spokesperson declined to comment on the current status of the cracker.
The US company has 680,000 tonnes/year of ethylene capacity at the site.
Eastman Chemical restarted its 141,000 tonne/year Longview cracker 3 in northeast Texas on 28 July, according to a market source. The cracker has returned to full operating rates, the source said.
Eastman shut the unit down in the first week of July on account of a vibration problem.
The company has another 141,000 tonne/year cracker in Longview and a larger unit at the same site with 358,000 tonnes/year of ethylene capacity.
A spokesperson for Eastman could not be reached for comment.
Several companies are planning to hold maintenance turnarounds over the next few months. According to market sources, lost production could reach 760m lb (345,000 tonnes), or 1.3% of US capacity, based on the length and the size of the crackers involved.
Formosa's Point Comfort cracker 2 in Texas will go down on 1 September for 35-40 days. The unit has 816,000 tonnes/year of ethylene capacity. A Formosa spokesperson previously confirmed the company has a shutdown scheduled for September.
At least three other US producers are expected to carry out maintenance in September and October, but were not disclosing the information publicly.
According to sources, ExxonMobil will shut down its 1m tonne/year Baton Rouge cracker in Louisiana on 1 September for a 45-day turnaround.
Shell will follow with a shutdown at its Deer Park cracker in Texas on 1 October for 45 days. The company has 835,000 tonnes/year of capacity at the site.
Next is Dow Chemical's 610,000 tonne/year St Charles cracker in Louisiana, which will go down on 10 October for 30 days.
ExxonMobil is also said to be planning a 45-day turnaround at its 1.2m tonne/year Baytown cracker in Texas, but the unit is not expected to go down until 1 January 2012.
An ExxonMobil spokesperson could not confirm the information on the turnarounds. Dow and Shell did not respond to a request for comment.
Market sources said NOVA Chemicals in Canada was also planning to shut down its Corunna cracker in Ontario, but the 44-day turnaround was unlikely to cause any impact to US prices.
The 839,000 tonne/year cracker is expected to go down on 1 October, according to information in the market.
NOVA did not respond to a request for comment.
Downstream
July contract prices in the US polyethylene (PE) market settled lower by 3-4 cents/lb for all grades. Producers initially said they were standing firm on a 3 cent/lb decrease, but buyers who earned lesser decreases in June were able to push for a larger decrease in July.
Producers have proposed a 5 cent/lb increase for August, but most sources say that increase is premature and will likely not go into effect until September when there are numerous cracker outages planned.
Demand is expected to improve in August and September, as buyers prepare for the peak period ahead of the Christmas season. The possibility of hurricanes in the Gulf of Mexico also may encourage some pre-buying, one producer said. The spot market was tighter, with prices expected to increase.
| Indicative Natural Gas Liquid (NGL) prices – Mont Belvieu, TX |
| US$/gal | July 29 | July 22 | July 15 | July 08 |
| Propane | 1.56 | 1.53 | 1.53 | 1.53 |
| Butane | 1.94 | 1.85 | 1.85 | 1.88 |
| Isobutane | 2.08 | 2.10 | 2.03 | 2.02 |
| N. Gasoline | 2.44 | 2.47 | 2.47 | 2.45 |
| Ethane | 0.84 | 0.82 | 0.81 | 0.81 |
| NYMEX Closing | July 29 | July 22 | July 15 | July 08 |
| Ethylene | 63.13 | 61.25 | 57.62 | 56.50 |
| Ethane | 83.78 | 83.06 | 80.18 | 79.75 |
| Crude Oil | 95.70 | 99.87 | 97.24 | 96.20 |
| Natural Gas | 4.15 | 4.39 | 4.54 | 4.20 |
($1 = €0.70)
This week on ICIS ( www.icis.com ):
29/07/2011 18:23 INSIGHT: Producers retain some confidence following the soft patch
29/07/2011 14:30 Europe August propylene fully settles after second number emerges
29/07/2011 06:27 Japan chemicals output up 3% in June on continued quake recovery
29/07/2011 00:08 US Flint Hills Texas olefins unit may start up during the weekend
28/07/2011 23:48 PE plant turnarounds in Mexico to intensify in August, September
