Louisiana ethylene’s premium to Texas prices climbed to 24 cents as logistical and production constraints have caused a growing spread between the markets, market sources said Tuesday.
US spot ethylene for March delivery traded at 58 cents/lb through the Choctaw pipeline system in Louisiana, compared to 34 cents/lb for March delivery through the Mont Belvieu Williams system in Texas, market sources said. Both trades occurred on Tuesday.
The spread has been seen increasing due to ongoing repairs at the Evangeline Ethylene Pipeline and delayed restarts at Williams Olefins’ Geismar, Louisiana, ethylene plant.
The repairs to the 176-mile Evangeline, which carries ethylene from Texas to Louisiana, should last through the end of May with the pipeline returning to service in June, a source with the company that operates the pipeline has said.
Williams’ Geismar plant has yet to return to full operation. The plant has been expanded to a capacity of 885,000 mt/year, but sources have said the unit may not come online until the second quarter. The unit had a fire and explosion on June 2013.
In Texas, relative production stability and strong production rates have brought prices to the low-to-mid 30s, reaching a 54-month low of 33.50 cents/lb FD USG earlier in the month. Platts assessed US spot ethylene Tuesday at 34 cents/lb FD USG for March and April product.
The spread between Louisiana and Texas was previously seen at 23 cents on March 13 based on trades in both regions.
– Platts.com
