US Steam Cracker Margins Climbed on Higher Spot Prices and Chemical Plant Outages

US steam cracker margins climbed last week on higher spot prices and chemical plant outages. 

The US ethylene spot price jumped 6 cents on the week and was assessed Friday at 60-60.50 cents/lb FD USG, as olefins producer Williams declared a force majeure out of its Geismar, Louisiana plant, according to sources. 

In addition, Flint Hills Resources' light olefins unit in Port Arthur, Texas, was shut Thursday after the loss of steam supply, according to a company filing with Texas Commission on Environmental Quality. Both facilities were expected to be back in operation by Tuesday. 

Ethane-based margins were assessed Friday at 41.50 cents/lb, up 4.36 cent since the December 14 assessment. 

Ethane/propane mix-based margins were estimated at 43.84 cents/lb, up 3.30 cent/lb from 40.54 cents/lb on December 14. 

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

US Gulf Coast purity ethane was up 2 cents/gal since December 14, assessed Friday at 24.75 cents/gal. Gulf Coast E/P mix was up 5 cents for the week, assessed Friday at 24.50 cents/gal. 

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 also increased, assessed at 43.22 cent/lb Friday, from 40.38 cents/lb on December 14. 

In heavier feedstocks, margins using light naphtha were estimated at minus 15.06 cents/lb.