Factbox: US contract ethylene settles at all-time low

The US ethylene contract settled at a record low on Thursday amid growing coronavirus pandemic-related economic and market uncertainties.

US contract ethylene prices for March settled down more than 9% at 21.75 cents/lb on Thursday, eclipsing the previous all-time low of 23.50 cents/lb in June last year. S&P Global Platts began assessing contract ethylene in January 2003.

Spot ethylene has been hitting new lows for weeks as coronavirus uncertainty saps demand. Spot prices fell to 11.75 cents/lb in early June 2019 amid oversupply, which was then the all-time low, and fell below that mark on March 16 to 11.50 cents/lb FD Mont Belvieu. Spot prices have largely continued that downward trajectory since.

At the same time, feedstock ethane prices have fallen from 12.875 cents/gal on March 16 to as low as 9.25 cents/gal on March 23. On Thursday, non-LST ethane prices finished at 10.375 cents/gal, down 1% on the day, Platts data showed.

Ethane is the primary feedstock for US crackers, including those with 10.68 million mt/year of new capacity that have come online since 2017. Naphtha, the primary cracker feedstock everywhere else in the world except the Middle East, has become much cheaper as crude prices crashed amid the Saudi Arabia-Russia price war, squeezing the margin advantage ethane gives US producers.

USGC light-straight run naphtha prices have fallen to 29.25 cents/gal from 50.75 cents/gal on March 16.

"All ethane crackers should be trimming rates, or at least not producing any extra spot material at zero margin," said a senior manager at S&P Global Petrochemical Analytics. "They are not the low-cost producer now, even if short term, due to the naphtha plunge."

Also Thursday, crude futures gained after President Donald Trump tweeted that Saudi Arabia and Russia would cut output.

INFRASTRUCTURE

**Brazil's plastics sector expects to see lower production in 2020 compared to 2019, while Abiplast, Brazil's plastics trade group, said operations will continue.

**Celanese said on Thursday that it has prioritized operations to provide specialty chemicals used to produce ventilators, respirators and other critical medical equipment amid the US coronavirus pandemic response.

**Mexico's Braskem Idesa has been deemed an essential venture supplying raw material to pharmaceutical, medical and other sectors and would continue operating during a national emergency because of the pandemic.

PRICES

Olefins

**Non-LST ethane prices fell 1% on the day to 10.375 cents/gal.

**Spot April ethylene prices fell 0.375 cent to 8.625 cents/lb FD Mont Belvieu, while FD Choctaw prices were flat for April at 8 cents/lb.

**March ethylene contracts settled down 9% at 21.75 cents/lb, down 2.25 cents/lb from February.

**Non-LST propane prices rose 8% to 27 cents/gal Thursday.

**April spot polymer-grade propylene prices rose 0.75 cent to 22 cents/lb FD USG on Thursday, while refinery-grade propylene rose 0.5 cent to 9.75 cents/lb.

Polymers

**Export low density polyethylene prices were unchanged on the day at $937-$959/mt (42.5-43.5 cents/lb) FAS Houston.

**Export high density polyethylene blowmolding fell $22/mt Thursday to $662-$684/mt (30-31 cents/lb) FAS Houston.

**Export linear low density polyethylene butene prices fell $22/mt day on day to $662-$684/mt (30-31 cents/lb) FAS Houston.

**Export homopolymer polypropylene prices were flat Thursday at $1,058/mt FAS Houston.

Aromatics

**US MTBE FOB USG prices rose 2.47 cents/gal to 57.50 cents/gal.

**April US methanol FOB USG prices fell 1 cent to 68 cents/gal.

**US April benzene finished up 7 cents at 95 cents/gal DP USG.

**Prompt-month US styrene monomer fell $5 to $400/mt, tightening the spread from April to May, with the forward month up $10 at $380/mt.

**FOB USG April and May toluene prices fell 4 cents to 99 cents/gal.

**FOB USG April and May mixed xylenes prices rose 1 cent to 104 cents/gal.

**FOB USG paraxylene prices fell $5/mt to $490/mt.

**USGC light straight-run naphtha prices rose 20.6% to 29.25 cents/gal on Thursday.

**NYMEX May RBOB settled at 66.28 cents/gal, up 11.63 cents.

**US acetic acid spot volumes fell $7/mt on the week to $443/mt FOB USG.

**Vinyl acetate monomer prices declined $7/mt to $843/mt, in line with acetic acid prices.

****Export 2-ethyl hexanol prices fell $25/mt on the week to $725/mt, while export normal butanol was flat at $610/mt.

TRADE FLOWS

**Panjiva, the trade analysis unit of S&P Global Market Intelligence, said Thursday that US seaborne imports of pharmaceuticals and precursors declined 3.9% year over year in the first three weeks of March.