Ethylene prices in Asia have been weighed down by the resumption of supplies from Northeast Asian producers and weak demand from downstream buyers, market sources told Platts.
"The market is very quiet," a Chinese trader said. "Polyethylene prices are falling quickly, so buyers can't buy spot cargoes right now."
High density polyethylene (HDPE) film grade was assessed at US$1400/mt CFR Far East Asia Thursday, down US$26/mt week on week. This was on the back of poor demand in the Chinese market, where orders for finished products have dwindled. In addition, downstream PE converters said the uncertainty in the European economy has led to a fall in export orders since the end of last year. As per one seller, his contract customers had also requested to delay delivery of their cargoes, another signal that demand from downstream users was low.
Apart from poor demand, market participants point to the returning supply from Northeast Asian producers as another reason for the drop in ethylene prices. The restarted plants in the region include Taiwan's CPC, Honam, YNCC. Demand created by the Showa Denko issue is thinning and Nan Ya is shutting one MEG line in May.
CPC restarted its No. 5 naphtha-fed steam cracker at Kaohsiung, after it was shut April 6 following a fire at a pipe connecting a butadiene unit to storage facilities. The steam cracker has a design capacity of 500,000 tpa of ethylene. South Korea's Honam Petrochemical restarted its naphtha-fed steam cracker at Yeosu April 8, after completing a planned turnaround. The cracker has a design capacity of 720,000 tpa of ethylene. Yeochun NCC restarted its No. 2 naphtha-fed steam cracker at Yeosu April 18 from a turnaround. The cracker can deliver 857,000 tpa of ethylene. Showa Denko had idled its naphtha-fed steam cracker at Oita as scheduled on March 10 for minor maintenance, but could not restart it as planned on March 21 due to a technical problem with the cooling system at the complex. The cracker, which has capacity to produce 695,000 tpa of ethylene, is now expected to restart only at the end of May. The delay had initially supported ethylene demand, but market sources said that the impact is starting to wear off. Taiwan's Nan Ya Petrochemicals, a Formosa Group affiliate, will shut its 700,000 tpa monoethylene glycol line in May for a turnaround, which would increase availability of ethylene cargoes on the spot market.