US spot ethylene hit a record low Wednesday, assessed at 13.25-13.75 cents/lb FD USG, amid a glut in supply.
Prompt-month ethylene was heard traded at 13.5 cents/lb Mont Belvieu-Nova basis by the close of the assessment. The market opened the day traded at 14.25 cents/lb MtB-Nova.
The assessment is the lowest since S&P Global Platts began assessing spot ethylene markets in the US Gulf Coast in July 2004.
Prior to this month, the previous all-time low assessment was 15.375 cents/lb on December 4, 2008, according to S&P Global Platts data.
The previous record low came amid plummeting sales and margins resulting from the global financial crisis, which resulted in reduced run rates, plant shutdowns and layoffs across the USG region.
However, Wednesday's low trade stems from significantly different market dynamics.
Fueled by the shale gas boom in North America, the US ethylene market stands to see a more-than 35% increase in production capacity by 2019.
More than 3.5 million mt/year of new capacity has been added in the last 12 months, with players including Ingleside -- a joint venture between Occidental Chemicals and Mexichem -- DowDuPont, and Chevron Phillips Chemical starting new crackers in Texas.
Another 4 million mt/year of new ethylene capacity is slated to come online this year, with more expansions slated for 2019 and beyond.
North America's ethylene production during the next decade is expected to climb from approximately 33.7 million mt in 2017 to nearly 48.65 million mt in 2026, according to estimates from S&P Global Platts Analytics.
