Positive US Ethylene Chain Dynamics Reflect Near-Record Low Ethane and Propane Prices and Lean Polyethylene Inventories

Date: 2015-08-25

Heading into 2H15 US ethylene chain fundamentals remain positive despite growing global growth concerns and declining oil prices. Positive US ethylene chain dynamics reflect near-record low ethane and propane prices and lean polyethylene inventories (30 days vs 3-yr avg of 34 days). 

In contrast, propylene fundamentals have weakened driven by a shift in ethylene feedstock to propane which is increasing propylene supply at a time when inventories are already at near record levels. As a result propylene prices are at 6 yr lows. 

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