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.
