OREANDA-NEWS. December EPC ethane spot volumes traded were 27pc lower than a year ago as ethane was a less attractive feedstock compared to propane. But US ethane exports and rising ethylene production in coming months should lead to higher traded volumes.

US ethane demand is expected to increase because of increasing ethylene capacity with expected turnarounds in the year. Also adding to potential demand, Enterprise Products Partners' ethane export facility is expected to begin operations in the third quarter.

December saw the most ethane volumes traded during the fourth quarter of 2014 and 2015, though at 6.61mn bl traded, December 2015 saw about 2.46mn fewer bl traded than the same month during the prior year. EPC ethane spot prices averaged about 15?/USG in December 2015, down about 2.5? from December 2014.

The expected increases in ethane demand will likely not balance out high ethane production and recovery levels, but should increase volumes traded as market participants manage larger ethane inventories, according to a market observer. "With more volumes moving around I'd expect the petrochemical traders to be in the market more, and speculators will have more liquidity to trade," he said.

Ethane demand should also receive support from new, relatively inflexible crackers scheduled to come online during the next few years. While low prices across the energy space have kept other natural gas liquids competitive with ethane as a feedstock, there "should be a lot of baseload ethane," the market participant added.