Last week the price of ethylene dropped from the low 50s per pound down to the low 40s. In a big flip-flop, propane has been the preferred feedstock for petrochemical plants on the Gulf Coast for a couple of weeks now (it had been ethane for the most part of the last 3+ years). And the petchem market hit ethane where it hurts, whacking the price down to 29.875 cnts/gal on Friday according to OPIS. A month ago that price was 50 cnts/gal. In October of last year the price was almost $1.00 (see graph below). This is good news for petchems, right? Well, it all depends on the margin that the petchem realizes on the feedstocks that are run. So to figure that out, let’s get to Part III of our series on the economics of petrochemical feedstocks.