Ethylene margins fell to 30.31 cents/lb ($668/tonne, ?74/tonne) last week, from 34.96 cents/lb a week earlier, using ethane as a feedstock.
The average US ethylene spot price dropped by 8% in the week ended 24 June, pressured by softer demand and a drop in derivative prices, market sources said.
Ethylene for June traded at 57.50-63.00 cents/lb, down from 65.25-66.00 cents/lb a week ago, while July ethylene traded at 56.50-63.00 cents/lb, down from 64.25-65.50 cents/lb in the previous week.
The slump in spot prices last week reflected weaker demand for polyethylene (PE) in both the domestic and export markets, sources said, adding that some PE producers were actually selling ethylene instead of PE.
A decline in energy prices and a drop in feedstock costs also were cited as factors putting additional pressure on the monomer.
Ethylene was likely to remain on a downtrend in the short term, sources said, citing an outage the INEOS La Porte PE plant in Texas and the restart of LyondellBasell's OP-2 Channelview cracker, also in Texas.
Market sources said the outage at INEOS was expected to last until 1 July. Talk circulated in the market that the company had declared force majeure on PE, but one source said INEOS had not formally announced a restriction.
The company did not respond to a request for comment late on Friday.
Meanwhile, LyondellBasell on Monday said it had completed the turnaround in Channelview.
The 873,000 tonne/year unit, which was the only US cracker down last week, had been off line for nearly two months.
Market sources expect the restart of production at the site to put additional pressure on spot ethylene.
($1 = ?.71)
