US ethylene contacts for October settled 0.25 cent/lb lower, with the month's net transaction price at 28.25 cents/lb, market sources said Wednesday.
The decrease puts contract prices at their lowest level since the 27.75 cents/lb seen in December 2003, Platts data showed. The September settlement was at its lowest level since the 28.5 cents/lb seen in December 2008.
The drop for October was on the lower end of market expectations, which were talked at a 1-2 cent/lb drop, given that strong run rates at most US Gulf Coast production facilities led to a substantial buildup of inventories and a subsequent mid-month drop in pricing to 18.5 cents/lb in early October, which was near the low set in mid-December 2008.
US ethylene contracts are typically settled retroactively on a monthly basis and take into consideration spot ethylene and feedstock prices.
An October net transaction price settlement at 28.25 cents/lb would mean the posted price for the month would decline to 32.75 cents/lb.
In spot markets, US spot ethylene prices dropped 0.75 cent/lb Wednesday, assessed at 23.75-24.25 cents/lb FD USG for prompt-month deliveries. December was also 0.75 cent/lb lower for the day at 23.75-24.25 cents/lb FD USG. November was traded at 23.75 cents/lb MtB Wms in the morning and at 24 cents/lb in the afternoon. One December deal was concluded at 24 cents/lb MtB Wms.
