US steam cracker margins rose week on week as feedstocks prices declined, and while the continental US is enjoying a relatively warm winter. Mild weather forecasts for the upcoming months have lead to a drop in the price of propane, which in turn has shown to be feedstock of choice for ethylene cracking for the past week.
Margins using propane as feedstock jumped 7.45 cents/lb for the week, assessed at 47.20 cent/lb Friday, from 39.75 cents/lb on December 28.
The US ethylene spot price ended the week 0.75 cents/lb higher, assessed Friday at 60-60.50 cents/lb FD USG, as ethylene markets were heard stabilizing at the 59-61 cents/lb level, according to market sources.
Ethane-based margins were assessed Friday at 42.33 cents/lb, up 1.33 cents/lb since the December 28 assessment.
Ethane/propane mix-based margins were estimated at 45.20 cents/lb, up 2.12 cents/lb from 43.08 cents/lb on December 28.
E/P mix and ethane are generally the preferred feedstocks of US olefins producers.
US Gulf Coast purity ethane was down 1.75 cents/gal since December 28, assessed Friday at 22.75 cents/gal. Gulf Coast E/P mix fell 2.50 cents/gal for the week, assessed Friday at 22.50 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).
In heavier feedstocks, margins using light naphtha were estimated at minus 8.54 cents/lb.
