According to reports, ethylene prices in the United States rose sharply last week due to increased spot exports and the commissioning of multiple downstream devices.
The price of MtB-NOVA ethylene in December was 22.5 cents/lb, the price of MtB-EPC ethylene was 23.5 cents/lb in December, and the price of Choctaw ethylene was 24.25 cents/lb in December. As of last weekend, the price of ethylene at the NOVA hub rose 22% to 27.5 cents per pound. The ethylene price at the Enterprise hub rose 16% to 27.25 cents/lb, and the ethylene price at the Choctaw hub rose 18% to 28.5 cents/lb.
According to OPIS Petrocem Wire data, since November 1, the maximum estimated operating rate of crackers on the Gulf Coast of the United States has remained at a relatively stable level of 95%. Previously, after Lake Charles in Louisiana was hit by hurricanes "Laura" and "Delta", the cracker in the area had been shut down for more than two months, or its load was reduced. During the peak shutdown period, the ethylene operating rate in the U.S. Gulf of Mexico dropped to 69%.
Due to the hurricane, the production of the cracking unit was shut down, and the US ethylene spot export volume fell. In August it was 49,000 tons, in September it was 42,000 tons, and in October it was 28,000 tons. After the hurricane, as supplies returned to normal, ethylene spot exports increased. According to the plan, the spot export of ethylene in November reached 60,000 tons, and by the first week of December, the loading window for December has arranged 80,500 tons. The highest export month before this year was 99,200 tons in July.
On the downstream side, Formosa Plastics announced that its low-density polyethylene (LDPE) plant was put into production on November 30 at Point Comfort, Texas. At the same time, the olefin No. 1 unit at the production base is still closed and has been undergoing maintenance since March. The newly formed Sasol/Leondel Basel joint venture, Louisiana Integrated Polyethylene, also increased the production of its new LDPE plant in Lake Charles, Louisiana.
During the COVID-19 pandemic, due to consumers' consumption habits shifting to more packaged goods, the domestic demand for PE resin in the United States has maintained a growth momentum. In particular, the US dollar has fallen sharply, and the Asian PE market, especially the Chinese market, has performed strongly. In November and December, the US PE resin export demand also accelerated. Strong export demand drove up the spot price of Houston train ethylene.
Source: Chemical Network
