Ethane Falls to Near Five-Year Low in Texas Trading

Ethane, a component of natural gas used to make ethylene, fell 5.3 percent in Texas to the lowest price in almost five years, benefiting Dow Chemical Co. (DOW) and other plastics producers.

Ethane at Mont Belvieu, the main supply hub for Gulf Coast chemical makers, dropped to 22.25 cents a gallon at 10:06 a.m. in New York, according to Liquidity Partners data compiled by Bloomberg. That’s the lowest price since at least Jan. 28, 2008.

Ethylene is used to make polyethylene plastic, an ingredient in packaging, and hundreds of other chemicals. Dow, LyondellBasell Industries NV (LYB) and Westlake Chemical Corp. (WLK) are among producers expanding U.S. ethylene production to take advantage of low gas prices, which have fallen as new drilling methods have increased output from shale formations.

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