The contract prices of US ethylene for May were up from April, marking the first increase since October. Market sources informed SSESSMENTS.COM that US ethylene contracts increased from 20.50 cents/pound in April to 24.0 cents/pound ($529/ton) in May. Meanwhile, front-month ethylene prices were up by about 8-9 cents/pound from a month earlier to 10.125-12.750 cents/pound in May, driven by rising price of feedstock ethane.
Ethane prices rose due to reduced associated gas production shale wells as producers lowered drilling activity amid low oil prices. Despite rising prices, ethane remains the preferred ethylene feedstock in the US because co-products of cracking other feedstocks such as naphtha, butane, and propane have limited outlets.
