Improved buying interest, rising feedstock pushes up ethylene prices in USA

Sharp upward movements in prices was seen in the first week of 2010, globally. Propped by rising ethane prices and better buying interest, ethylene prices have improved by about 90 dollars in 2010 in USA. Spot ethylene prices in the US at which few deals have been concluded since the New Year holidays was reported at around US$925-930/ton FD USG as per Chemorbis. Restricted supplies due to a spate of cracker outages in USA in December and firm buying interest on increased sell ideas by downstream PE exporters to the robust market of China, are at play in the US ethylene markets. The bullishness in spot ethylene markets along with limited supplies in the country has led some players to speculate that the US ethylene contract for January will also mark an increase from the December contract settlement. However, despite significant increases, American ethylene prices continue to lag considerably behind the prevailing price levels in other major global markets such as Europe and Asia. In Asia, spot ethylene prices have begun to move higher this week after hovering at around US$1145-1155/ton CFR Northeast Asia through most part of December. In the first week of 2010, spot ethylene prices in Asia rose by 50 tons at around US$1205-1210/ton CFR Northeast Asia on surging downstream PE markets and limited naphtha supplies throughout the region. This puts Asian spot ethylene at a US$280/ton premium as compared to price levels seen in USA. A firmness is expected in the Asian ethylene markets in Q1-10 on several planned cracker shutdowns in Asia. Spot ethylene prices in Europe gained around €25-30/ton in 2010, in line with the €30/ton increase seen in the January contract price in the region. With spot prices standing at around €795-800/ton (US$1138-1146/ton) FD NWE, spot prices in Europe carry a premium of US$215/ton when compared with the prevailing spot prices in the US.
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