Derivative Instruments

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Commodity Risk Management

The Company uses derivative instruments to reduce price volatility risk on raw materials and products as a substantial portion of its raw materials and products are commodities whose prices fluctuate as market supply and demand fundamentals change. Business strategies to protect against such instability include ethylene product feedstock flexibility and moving downstream into the olefins and vinyls products where pricing is more stable. The Company does not use derivative instruments to engage in speculative activities.

Gains and losses from changes in the fair value of derivative instruments that are not designated as hedging instruments were included in gross profit in the consolidated statements of operations for the three and six months ended June 30, 2016 and 2015.

The exposure on commodity derivatives used for price risk management includes the risk that the counterparty will not pay if the market declines below the established fixed price. In such case, the Company would lose the benefit of the derivative differential on the volume of the commodities covered. In any event, the Company would continue to receive the market price on the actual volume hedged. The Company also bears the risk that it could lose the benefit of market improvements over the fixed derivative price for the term and volume of the derivative instruments (as such improvements would accrue to the benefit of the counterparty).

The fair values of derivative instruments in the Company's consolidated balance sheets were as follows:

	Derivative Assets
	Balance Sheet Location	Fair Value as of
		June 30, 2016		December 31, 2015
Not designated as hedging instruments
Commodity forward contracts	Accounts receivable, net	$	4,491	$	3,465
Commodity forward contracts	Deferred charges and    other assets, net	5,517		2,088
Total derivative assets		$	10,008	$	5,553

	Derivative Liabilities
	Balance Sheet Location	Fair Value as of
		June 30, 2016		December 31, 2015
Not designated as hedging instruments
Commodity forward contracts	Accrued liabilities	$	2,215	$	9,325
Commodity forward contracts	Other liabilities	5,506		12,437
Total derivative liabilities		$	7,721	$	21,762

The impact of derivative instruments that have not been designated as hedges on the Company's consolidated statements of operations were as follows:

Derivatives Not Designated as    Hedging Instruments	Location of Gain (Loss) Recognized    in Income on Derivative	Three Months Ended June 30,				Six Months Ended June 30,
		2016		2015		2016		2015
Commodity forward contracts	Gross profit	$	11,567	$	595	$	15,624	$	4,836

See Note 13 for the fair value of the Company's derivative instruments.

Disclosure about Offsetting Asset and Liability Derivatives

Certain of the Company's derivative instruments are executed under an International Swaps and Derivatives Association ("ISDA") Master Agreement, which permits the Company and a counterparty to aggregate the amounts owed by each party under multiple transactions and replace them with a single net amount payable by one party to the other. The following tables present the Company's derivative assets and derivative liabilities reported on the consolidated balance sheets and derivative assets and derivative liabilities subject to enforceable master netting arrangements.

	Derivative Assets as of
	June 30, 2016		December 31, 2015
Derivative assets subject to enforceable master netting arrangements	$	504	$	—
Derivative assets not subject to enforceable master netting arrangements	5,773		462
Total derivative assets	$	6,277	$	462

	June 30, 2016							December 31, 2015
Offsetting of Derivative Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Assets Presented in the Consolidated Balance Sheet
Commodity forward contracts	$	4,235	$	(3,731	)	$	504	$	5,091	$	(5,091	)	$	—

	June 30, 2016						December 31, 2015
Derivative Assets by Counterparty	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount
Counterparty A	$	414	$	—	$	414	$	—	$	—	$	—
Counterparty B	90		—		90		—		—		—
Total	$	504	$	—	$	504	$	—	$	—	$	—

	Derivative Liabilities as of
	June 30, 2016		December 31, 2015
Derivative liabilities subject to enforceable master netting arrangements	$	290	$	5,803
Derivative liabilities not subject to enforceable master netting arrangements	3,700		10,868
Total derivative liabilities	$	3,990	$	16,671

	June 30, 2016							December 31, 2015
Offsetting of Derivative Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
Commodity forward contracts	$	4,021	$	(3,731	)	$	290	$	10,894	$	(5,091	)	$	5,803

	June 30, 2016						December 31, 2015
Derivative Liabilities by Counterparty	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount
Counterparty A	$	290	$	—	$	290	$	5,564	$	—	$	5,564
Counterparty B	—		—		—		239		—		239
Total	$	290	$	—	$	290	$	5,803	$	—	$	5,803