Naphtha and ethylene prices have climbed in line with oil prices in Europe and Asia. However, advantageous natural gas prices in USA have resulted in ethylene being offered at a sharp discount, resulting in a wide gap in prices in USA and Asia/Europe. Hence, PE offers from USA have been very competitive.
Increased costs of ethane pushed up ethylene prices in USA in mid-October that held steady for about a week. However, by end of month, falling ethane values, an ease in the supply scenario and lack of buying enthusiasm pulled down ethylene markets to less than US$700/MT. Supplies are expected to ease with the expected start up of Shell’s cracker at Texas. The long period of transit, however, seems to be a hurdle to easy sales from USA.