HOUSTON (Feb. 23, 2010)—U.S. ethylene prices continued to rise during February, reaching 54 cents per pound on the March New York Mercantile Exchange, according to the daily petrochemical industry newsletter PetroChem Wire.
The current ethylene contract, which began trading in July 2009, settled at 46.75 cents per pound for February, PCW said. In the overall cash markets, ethylene due to be shipped in March traded up from 51 to 54 cents per pound during February.
Supply concerns are driving ethylene prices so far in 2010, according to PCW Executive Editor Kathy Hall. Ethylene price increases are outpacing those in its largest downstream market, polyethylene resins, she said.
Steam crackers in Texas and Louisiana produce more than 95 percent of the country's ethylene—a combined daily total of about 150 million pounds, PCW said. Currently the 36 steam crackers in those two states have a combined operating rate of 91 percent. By comparison, steam cracker operating rates this time last year were only about 65 percent, but ethylene prices stood at 27 cents per pound.
Ethylene is a building-block chemical for polyethylene and other plastic resins, as well as solvent in rubber and other product manufacturing. So far in February, more than 200 million pounds of ethylene have traded on the spot market, PCW said.