BMO sees US ethane prices up 33% since July on export growth
BMO Capital Markets reports US ethane prices up 20% month-to-date and 33% since July, outpacing natural gas. Factors include Chevron-Qatar plant commissioning, export capacity expansions, and increased shipping. CMA forecasts higher production costs, potentially reducing advantages for Dow, LyondellBasell, and Westlake.
How this was made
The 30-second read
Why it matters
The surge reflects expanding export capacity and new cracker projects, raising feedstock costs for US chemical firms.
Market read
Ethane price dynamics could reshape cost structures for major US chemical producers.
What to watch
Potential new ethane storage capacity and upcoming cracker commissioning could absorb price pressure.
Background
BMO Capital Markets reports a 33% rise in US ethane prices since July, outpacing natural gas.
Ticker impact
BMO notes rising ethane prices may reduce US producer advantage for Dow.
likely pressure as market prices in higher feedstock costs
Ethane is a key input for Dow's chemical operations; price rise erodes cost advantage.
BMO says ethane price surge may cut LyondellBasell's US producer advantage.
likely pressure as higher feedstock costs affect profitability
LyondellBasell relies on ethane as a feedstock; price jump reduces margin outlook.
BMO forecasts ethane price rise may diminish Westlake's US advantage.
likely pressure as market incorporates higher input costs
Westlake's ethane processing business is sensitive to feedstock price movements.
Market effects
Rising ethane prices signal tighter margins for US chemical producers.
US ethane market strength may affect North American petrochemical sector.
Higher ethane costs could influence global feedstock pricing and trade flows.
Counterpoint
If ethane demand softens, price gains may be temporary, limiting impact on chemicals.
Key entities
- analystBMO Capital Markets
Provides the ethane price analysis.
- projectChevron-Qatar Golden Triangle plant
New ethane cracker expected to start commissioning in late 2026.
