Climbing stock levels weigh down spot ethylene in Asia

Spot ethylene prices in Asia have posted more visible decreases over the past week and hit the lowest level in over a year, as per ChemOrbis. Lower ethylene prices were attributed to rising stock levels as well as the prevailing downward pressure from weak upstream markets. Spot ethylene prices declined by US$70/ton on a CFR Northeast Asia basis while posting relatively smaller decreases of US$15/ton on a CFR Southeast Asia basis. In addition to rising supply levels in Northeast Asia, sluggish demand and the weak energy markets were cited as other factors exerting downward pressure on the ethylene market. Following the recent softening, spot ethylene prices in Northeast Asia appear to have lost their premium over spot values in Southeast Asia for now, with ethylene being traded at a single level in both regions. Looking at the upstream markets, spot naphtha prices on a CFR Japan basis have declined by around US$30/ton over the past week to move below the US$700/ton threshold. The latest spot naphtha prices are standing at the lowest level since October 2010. According to ChemOrbis, in production news, Japan’s Idemitsu Kosan’s Tokuyama cracker was in restart phase as of November 7. The cracker, which has an ethylene capacity of 632,000 tpa, was shut on October 31 due to technical issues after resuming operations following a planned maintenance. There aren’t many planned shutdowns left in Asia for the remainder of 2014 and regional producers started to reveal their annual turnaround dates for 2015.
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