Ethylene falls in Asia, gains ground in Europe, USA

26-Oct-10
Last week, spot ethylene prices in Asia moved lower in response to rising supply levels in the region, while spot ethylene prices in Europe and USA gained ground on the strength of improved spot demand, as per Chemorbis. Cracker operators in both Asia and USA have begun to express concerns regarding their reduced operating margins, as Asian ethylene prices have fallen amid rising spot naphtha prices, while US ethylene prices have not risen fast enough to keep pace with the increases seen in ethane feedstock prices. In Asia, spot ethylene prices on a CFR NEA basis have fallen US$75/ton over the past week, with players pointing to rising supply levels as the main reason for the drop in prices. Formosa Petrochemical successfully restarted its 700,000 tpa No. 1 cracker last week and is now said to be running the plant at around 80% of capacity. The successful restart of Formosa’s cracker persuaded buyers throughout the region to retreat to the sidelines towards the end of last week while traders proved to be more willing to agree to discounts in an effort to pare down their stocks given the recent shift in the overall supply level. Chinese buyers commented that they are hesitant to rejoin the market this week as they remain uncertain about the medium-term economic outlook after the Chinese Central Bank’s recent decision to raise interest rates. Buyers in Southeast Asia are also increasingly hesitant to make fresh purchases given their expectations of rising supply levels from the Middle East in the coming months as well as the imminent scheduled restarts of several crackers in the region. While supplies are loosening in Asia, European sellers commented that they are withdrawing from the spot market these days as the ongoing strikes in France have forced most cracker operators in that country to put their facilities on standby. The French strikes have also created some logistical bottlenecks in Europe, encouraging greater buying interest for some ethylene derivatives and thereby providing support to the spot ethylene market. European cracker operators also pointed to higher naphtha feedstock prices as additional justification for higher ethylene prices, as surging naphtha costs have resulted in lower operating margins throughout the region. Spot ethylene prices on an FD NWE basis are notionally higher by around €20/ton this week. In the US, spot ethylene prices gained US$48/ton at the lower end of the range over the past week, with players attributing the rise in prices to stronger ethane feedstock costs and improved downstream demand. Cracker margins are said to have softened from the past week as the increases in ethylene prices have not been fast enough to match the recent rises seen in ethane prices. Much of the increases seen in spot prices over the past week occurred towards the end of last week, when several buyers reportedly entered the spot market to make purchases.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha
Milacron 450 ton electric injection molding machine

Milacron 450 ton electric injection molding machine