US ethane rejection leads to volatile prices

Spanish Market: LPG, Petrochemicals
20/07/23

A spike in US ethane prices at Mont Belvieu, Texas, following higher rates of rejection from gas processing plants this month led to higher intraday price volatility versus the volume-weighted average.

The midpoint of the daily traded range for July EPC ethane at Mont Belvieu rose to 39.75¢/USG on 18 July as ethane traded widely between 33.5-46¢/USG. That marked the highest price since 1 December, but the daily volume-weighted average of trade that same day was even higher, at 41.97¢/USG, a 2.22¢/USG premium versus the daily midpoint. Double-digit fluctuations in daily prices are rare for the feedstock, and Tuesday's move followed similar volatility in the traded range the previous day, when the volume-weighted average of 35.66¢/USG stood at a 1.28¢/USG discount to the daily traded midpoint of 36.94¢/USG.

Differentials between the daily midpoint and volume-weighted averages for ethane rarely exceed 1¢/USG. In May and June, the midpoint of the traded range averaged a 0.04¢/USG premium and a 0.08¢/USG premium, respectively, to the volume-weighted average.

By Ginikanwa Okoronkwo

Mont Belvieu ethane midpoint less VWA ¢/USG

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