Market and product
US front-month spot ethylene trades at 29-month low
Two trades for December material were done at 42 cents/lb ($926/tonne) on Tuesday, the lowest deals done since trades at that level during the week ended 29 June 2012.
Spot ethylene prices have been steadily falling since September on the back of improved supply, weaker demand and falling global energy prices.
The improved supply is the result of several cracker restarts in November, and has been boosted by lower domestic consumption as well.
Domestic consumption dropped on high ethylene prices and falling global prices for derivatives, pushing US derivatives producers to lower operating rates and retreat from the global market.
Falling energy prices have allowed overseas producers to lower their derivative prices, which could open up the US to competition in 2015.
Sources said buying of overseas derivatives is likely to be slow as US buyers are looking to keep inventories low ahead of year-end taxes.
