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Light feeds remain most profitable for US steam cracker operators

https://www.chemnet.com   Aug 10,2010
US steam cracker operators saw margins mixed on the week as spot ethylene closed slightly lower week on week. Spot prices appeared to peak early in the
week following several trades heard done at 37 cents/lb but have since pulled
back on the expectation that Dow will restart its LHC 7 olefins unit at Freeport, Texas at some point in the next week or so. Details and confirmation
from Dow were not immediately available.


With spot ethylene assessed Thursday at 36 cents/lb and ethane at 45.875 cents/gallon, light feeds remained the most profitable feedstock this week and
E/P mix remained the front runner with margins at 17.67 cents/lb while profits
from ethane were at 14.51 cents/lb. Margins from propane this week were down
slightly at 1.50 cents while butane remained negative at -10.20 cents/lb.


The Platts estimate of cracker margins measures the relative gain and loss in cents/lb of ethylene produced from cracking several feedstocks. The estimate uses the current spot price and yields of the various ethylene cracker products (ethylene, propylene, butadiene, benzene, toluene, xylene, fuel oil and LSFO) from cracking various light and heavy feedstocks (ethane,propane, butane, and an 80:20 E/P mix).


In contracts, participants in the US ethylene contract negotiations were unable to come to a consensus on July pricing and the July contract will now
be settled together with the August contract, sources told Platts this week.
The June US net contract price was at 39.50 cents/lb.
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