US Ethylene prices continue their upward trajectory amidst Exxon’s plans to shut down its largest refining facility

Exxon’s Baytown facility with a refining capacity of half a million barrels of crude per day continues to operate at lower run rates and ExxonMobil plans to shut it down by next week according to Reuters. ChemAnalyst had on the 6^th of January revised its forecast further upward for the US olefins market and specifically the ethylene market, as the prices indeed shot up by close to 70 USD/MT during the same week i.e., the first week of January 2022.

There had been a continuous uptrend in the prices of ethylene since the start of the new year. However, the downstream polyethylene prices had been tracing an anomalous price trajectory as prices of all the grades of polyethylene had witnessed a downtrend. The plastics market across North America, Middle East Asia and South Asia seems to be in doldrums as demand fails to pick up in the new year mainly over concerns regarding the new wave of pandemic which had disrupted the market signals from the end user markets.

The spot price of ethylene as of 17^th January stands at 970 USD/MT assessed on an FOB US Gulf basis. The prices of downstream HDPE have seen an average drop of 65 USD/MT week on Week as assessed on the 12^th of January and have since remained stable. The prices of LDPE film and LLDPE film grades too have seen a corresponding decrease of around 50 USD/Mt each during the same assessment period on an FOB Houston basis.

The price of ethylene is expected to stabilize in the coming weeks while that of polyethylene is expected to rebound during the early to mid-February period as per ChemAnalyst’s market intelligence wing, as the cloud of uncertainty surrounding the market fundamentals fans out and market players start to assess the actual demand with greater clarity. There could be disruption in production due to deep freeze conditions during the month of February.