Houston — US spot ethylene hit a record low Thursday, assessed at 15-15.25 cents/lb FD USG, amid a glut in supply.
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Зарегистрироваться сейчасPrompt-month ethylene was heard talked in a bid/offer range of 15-15.25 cents/lb Mont Belvieu-Nova basis by close of assessment. The market opened the day talked in a wide bid/offer range of 14-18 cents/lb MtB-Nova.
No deals on the Mont Belvieu-Nova system were heard. A 17-cent/lb April deal was heard on the Choctaw hub in Louisiana, with Choctaw currently talked at a 2-cent premium to Mont Belvieu-Nova.
The assessment is the lowest since S&P Global Platts began assessing spot ethylene markets in the US Gulf Coast in July 2004.
The previous all-time low assessment was 15.375 cents/lb on December 4, 2008.
"(These levels) will take us back to 10 years ago," a producer source said. "Ethylene was trading at 15.25 in 2008...wow."
The previous record low came amid plummeting sales and margins resulting from the global financial crisis, which resulted in reduced run rates, plant shutdowns and layoffs across the USG region.
Thursday's low stemmed from significantly different market dynamics.
Fueled by the shale gas boom in North America, the US ethylene market stands to see a more than 35% increase in production capacity by 2019.
More than 3.5 million mt/year of new capacity has been added in the last 12 months, with players including Ingleside -- a joint venture between Occidental Chemicals and Mexichem -- DowDupont, and Chevron Phillips Chemical starting new crackers in Texas.
Another 4 million mt/year of new ethylene capacity is slated to come online this year, with more expansions slated for 2019 and beyond.
North America's ethylene production during the next decade is expected to climb from approximately 33.7 million mt in 2017 to nearly 48.65 million mt in 2026, according to estimates from S&P Global Platts Analytics.
"The Texas [ethylene market is ]getting longer," a trader source said.
--Nida Qureshi, nida.qureshi@spglobal.com
--Bernardo Fallas, bernardo.fallas@spglobal.com
--Edited by Kevin Saville, kevin.saville@spglobal.com