Ethylene spot prices in North East Asia dip below US$900

As demand from China weakens along with deteriorating derivative markets amid a supply surplus, ethylene spot prices have dipped below US$900/MT to 3 month lows. Further declines in key ethylene derivatives have negatively impacted the markets, leading to a more than US$50/ton cut in prices this week. A regional 2,300-3,000 ton ethylene spot cargo for H1-October arrival into Taiwan was heard sold at US$880-890/ton CFR (cost and freight). These were levels not seen since late June 2009, according to ICIS pricing. Weak buying interest and anticipation of a supply glut form the Middle East have pulled down discussions for HDPE film grade into China by US$60/ton this week to around US$1200/ton CFR. Waning demand in China is being satiated by added ethylene supplies in the country with the start-up of Fujian Petrochemical’s new 800,000 tpa naphtha cracker in Quanzhou, and the high operating rates of 90-100% at China's crackers. The lack of spot demand from China has left traders with limited outlets for sale, at a time when Japan has some spot cargo surplus due to derivative plant turnarounds in September-October and high cracker run rates of close to 100% this month. Additionally, as derivative demand is expected to decline in Japan, more ethylene will be available for sale from Japan (for October loading) compared with September. Japanese producers may come under pressure to cut cracker rates in the fourth quarter – bringing an end to five months of high run rates – as margins were being squeezed by firm naphtha feedstock values and weakening olefins prices, including for propylene, which fell below US$1,000/ton CFR NE Asia this week. Cracker operators in Japan are considering reduction in operating rates, while those in Northeast Asia are also taking steps to trim down ethylene inventories due to uncertainty over the outlook for the fourth quarter The north-south arbitrage had opened up in late August due to the wide gap of around US$100/ton between the two regions. Ethylene had risen sharply in southeast Asia partly because of tight supply from Iran – a key supplier to the region. The supply shortfall had been partially filled in recent weeks by aggressive sales from Asian producers that were lured by prices hitting a high of US$1100/ton CFR SE Asia in late August. Discussion levels, however, have started to decline this month due to weakening PE markets, which was fuelling expectations that ethylene prices would come under further pressure.
  More News  Post Your Comment
{{comment.Name}} made a post.




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