Ethylene for July traded as high as 61.50 cents/lb ($1,356/tonne, €949/tonne) this week, rising on average by 7% from deals done at 55.50–59.50 cents/lb a week earlier.
The product was offered at 63 cents/lb on Friday against a 60 cent/lb bid.
No cracker outages were heard in the US this week, but market sources cited a series of turnarounds coming up over the next few months as the likely reason behind the uptrend.
Among the shutdowns is Formosa's Point Comfort cracker 2 in Texas, which will go down on 1 September for 35–40 days. The unit has 816,000 tonnes/year of ethylene capacity.
At least three other US producers are expected to carry out maintenance in September and October, but were not publicly disclosing the information.
According to sources, ExxonMobil will shut down its 1m tonne/year Baton Rouge cracker in Louisiana on 1 September for a 45-day turnaround.
Shell will follow with a shutdown at its Deer Park cracker in Texas on 1 October for 45 days. The company has 835,000 tonnes/year of capacity at the site.
Next is Dow Chemical's 610,000 tonne/year St Charles cracker in Louisiana, which will go down on 10 October for 30 days.
ExxonMobil is also said to be planning a 45-day turnaround at its 1.2m tonne/year Baytown cracker in Texas, but the unit is not expected to go down until 1 January 2012.
ExxonMobil, Dow and Shell did not respond to a request for comment. A Formosa spokesperson confirmed the company has a shutdown scheduled for September.
The rise in ethylene spot prices in the last two weeks surprised some market participants, who had expected prices to drop this month after the restart of LyondellBasell's Channelview cracker in Texas in late June.
Except for an outage at a small Eastman cracker in Texas early this month, US crackers were all up and running in July for the first time in several months.
The potential for more ethylene price increases is real, market sources said, since lost production from the turnarounds could reach 760m lb (345,000 tonnes), or 1.3% of US capacity, based on the length and the size of the crackers involved.
In addition, two turnarounds will take place in September, when the US hurricane season tends to peak.
Market sources said NOVA Chemicals in Canada is also planning to shut down its Corunna cracker in Ontario, but the 44-day turnaround is unlikely to affect US prices.
The 839,000 tonne/year cracker is expected to go down on 1 October, according to information in the market.
NOVA did not respond to a request for comment.
($1 = €0.70)
