US Steam Cracker Margins Climbed Week-on-Week

US steam cracker margins climbed week-on-week as ethylene prices reacted to the news of planned and unplanned outages in the US Gulf Coast region. 

ExxonMobil suffered an upset at its Baytown, Texas, olefins plant Tuesday. Westlake Chemical shut its Petro-2 steam cracker in Lake Charles, Louisiana, for expansion,the company said Thursday. Lastly, Eastman Chemical reported a restart of its Hydrocracking Plant #3A in Longview, Texas, Friday. 

Feedstocks prices also declined, following the release of data by the American Petroleum Institute on NGL inventories showing strong ethane stocks, with total stocks of ethane at 36.87 million barrels in November 2012, up 43.66% from November 2011. 

Ethane-based margins were assessed Friday at 46.46 cents/lb, up 4.13 cents/lb since the January 4 assessment. 

Ethane/propane mix-based margins were estimated at 49.61 cents/lb, up 4.41 cents/lb from 45.20 cents/lb on January 4. 

US Gulf Coast purity ethane is down 1 cent/gal since January 4, assessed Friday at 21.75 cents/gal. Gulf Coast E/P mix also declined 1 cent/gal for the week, assessed Friday at 21.50 cents/gal. 

E/P mix and ethane are typically the preferred feedstocks of US olefins producers. 

Platts' estimates of cracker margins measure 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, butane, benzene, toluene, xylene, fuel oil and low sulfur fuel oil) from cracking various light and heavy feedstocks (ethane, propane, butane, and an 80:20 E/P mix). 

Margins using propane as feedstock jumped 7.32 cents/lb for the week, assessed at 53.52 cent/lb Friday, from 47.20 cents/lb on January 4. 

The US ethylene spot price ended the week 4.50 cents/lb higher, assessed Friday at 64.50-65 cents/lb FD USG. 

In heavier feedstocks, margins using light naphtha were estimated at 5.34 cents/lb.