Ethylene in Asia, which had started firmly in 2010, have started to retreat since the beginning of the month as per Chemorbis, due to the increasing supplies from the Middle East- particularly from Saudi Arabia and Iran, and lack of demand from China as it breaks for the Lunar New Year. Prices are expected to continue to be under pressure as two new crackers will come online in March- Map Ta Phut Olefins in Thailand and Shell in Singapore.
Asian ethylene spot prices firmed up at the beginning of February, gaining US$200-205/ton CFR NEA, and US$165-170/ton CFR SEA from levels reported in early January. However, since then, the spot market has started to lose ground, shedding US$60-70/ton CFR NEA and US$105-115/ton CFR SEA since the beginning of February.
An influx of unexpected Middle Eastern cargoes was reported in Southeast Asia from one Middle Eastern producer, experiencing production problems at its PE plant where its 1.3 mln tpa cracker is running at full rates. This coupled with dwindling demand from China has pushed sellers to lower their prices further to invoke buying interest. Additionally, Asia will see two new capacities coming online, strengthening long supplies. Map Ta Phut Olefins is set to bring a 900,000 tpa steam cracker while Shell Chemicals is to start up a 800,000 tpa cracker in Singapore, in March.
Formosa has lowered run rates to 90% in January affecting its 2.9 mln tpa capacity in Taiwan, with no spot ethylene supplies for February. YNCC has reduced run rates at its 857,000 tpa ethylene plant to 91-92% from full capacity since February the 9th and is planning to maintain these levels for two weeks. Sanyo is planning a month long maintenance shutdown at its 470,000 tpa cracker in Japan starting from mid-February to April. LG Chem is to halt operations at its 900,000 tpa cracker in Japan to raise capacity to 1 mln tpa between March 3rd and April 8th. Showa Denko’s 695,000 tpa cracker in Japan will be shut in March until the end of April for maintenance. Tosoh’s 527,000 tpa cracker in Japan will also be down for a month during March-April for a turnaround. Formosa will halt operations at its 1.03 mln tpa No. 2 ethylene cracker in Taiwan for 50-60 days for maintenance in March. CNOOC-Shell is mulling a shutdown between March and May at its 800,000 tpa ethylene plant for 8 to 10 weeks, raising plant capacity to 950,000 tpa.