US ethylene spot prices are tumbling as the major new shale gas expansions come on line, as the chart based on ICIS pricing data confirms:

The collapse in margin has been sudden, but is hardly unexpected.  It is, of course, true that downstream polyethylene plants associated with the crackers were delayed by the hurricanes.  So ethylene prices may recover a little once they come online.  But unfortunately, that is likely to simply transfer the problem downstream to the polymer markets.

The issue is shown in the second chart, based on Trade Data Monitor data:

The problem, of course, was that companies and investors were fooled by the central bank stimulus programs. They told everyone that demographics didn't matter, and that they could always create demand via a mix of money-printing and tax cuts. But this was all wishful thinking, as we described here in the major 2016 Study, ‘Demand – the New Direction for Profit‘, and in articles dating back to March 2014.

Unfortunately, the problems have multiplied since then. President Trump's seeming desire to launch a trade war with China has led to the threat of retaliation via a 25% tariff on US PE imports. And growing global concern over the damage caused by waste plastics means that recycled plastic is likely to become the growth feedstock for the future.