Petrotahlil - Trade sources said initial May ethylene settlements emerged at 24.25 cents/lb on Wednesday, down 0.75 cent from April. Additional confirmation emerged on Friday, but one contract buyer confirmed it has declined the offer of 24.25 cents/lb. The declines thus far were in line with market expectations as trade sources have cited a continued decline in spot prices, and amply supply ahead of additional ethane cracker startups this year.
The decline in the May ethylene contract comes the same week that ethylene spot prices dropped to an all-time low of 11.75 cents/lb FD USG, according to S&P Global Platts data on Monday. The spot market rebounded on Wednesday to 12.125 cents/lb FD USG, where it remained early Friday.
May ethylene spot levels averaged 12.97 cents/lb FD USG, according to Platts data, which was down from the April ethylene spot average of 13.51 cents/lb FD USG.
Looking ahead, trade participants said they expected another decline for the June ethylene contract.
"Fed stocks are super bearish, and ethylene supply would be flat, so contract will be down again for June, I would guess," said one US olefins trader earlier this week.
Said another US olefins trader: "Continued pressure in anything could mean another 0.75-1.00 cent down."