OREANDA-NEWS. US ethylene prices will face significant downward pressure in the fourth quarter after a series of planned and unplanned outages supported prices through the summer.

The first half of the year saw a heavy turnaround season that took about 10pc of US ethylene production offline during the much of the second quarter. In August, spot ethylene prices were supported by unplanned outages at ExxonMobil's Baton Rouge, Louisiana, cracker and the BASF/Total cracker in Port Arthur, Texas. Front-month ethylene in the Williams cavern hit 32.75?/lb on 9 August, the highest level in nearly a year. August ethylene continues to trade at 32?/lb.

Much of the planned maintenance and expansion work concluded in the first half of the year. However more is coming in the third quarter. Maintenance and expansion work at LyondellBasell's Corpus Christi, Texas, plant, which will add 800mn lb/yr (400,000 t/yr) of ethylene capacity, should be complete in September. Planned maintenance is also scheduled at crackers in Cedar Bayou, Texas, and Plaquemine, Louisiana, in September.

Once this work is done, the added capacity stands to significantly lower US ethylene prices, as there are no additional derivative units or export capacity to consume it. A new polyethylene unit planned as part of a joint venture between Sasol and Ineos will likely be completed late in 2016, and the next significant wave of new polyethylene capacity won't start up until the second half of 2017, at the same time new crackers are commissioned.