Ethane prices fell at both hubs this week due to several ethane crackers remaining down because of scheduled maintenance combined with weak propane prices that are putting pressure on ethane to maintain its status as the most preferred ethylene feedstock.

Lower propane prices aren’t giving ethane prices much room to grow at this time. Ethane’s net margin as a feedstock was 49¢ per pound (/lb) compared to 43¢/lb for propane.

This resulted in the Mont Belvieu price dropping 9% to 43¢ per gallon (/gal), its lowest price since the week of Feb. 8, when it was the same. The margin at Mont Belvieu dropped 13% from last week. The Conway price fell 17% to 16¢/gal, which was the hub’s lowest price since it was 15¢/gal, also the week of Feb. 8. The margin was down 40% from the previous week.

The Conway price was also negatively affected by a delay in the start of Kinder Morgan’s Cochin pipeline that will transport approximately 13,000 barrels per day (b/d) of E-P mix from Conway to Nova Chemicals’ petrochemical complex in Sarnia, Canada. This delay is being caused by pending regulatory approvals that are expected to be finalized later this month.

Propane prices continued to decrease at both hubs because of excess storage caused by the mild winter. While it is possible that propane inventories will continue to rise and reach record levels in the second half of the year, thus pushing prices further down, it is more likely that low prices will increase exports before an excessive storage overhang occurs.

The Conway price for propane remained below the $1.00/gal threshold as it tumbled 6% to 93¢/gal. This was its lowest price at the hub since it was 92¢/gal the week of July 14, 2010. The Conway margin dropped 6% from last week. The Mont Belvieu price dipped 3% to $1.19/gal, its lowest price since the week of Feb. 15, when it was $1.18/gal. The Mont Belvieu margin was down 4% from the previous week.

Heavy NGL prices continued to hold firm at both hubs as they continued to keep pace with crude prices, which were up slightly this week. Natural gas prices were down 5% to $1.83 per million Btu (/MMBtu) at Conway while the Mont Belvieu price rose 1% to $1.89/MMBtu. This helped the heavy NGLs maintain their status as the most profitable NGLs to make at both hubs.

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