Last week saw spot ethylene prices move lower in Europe and Asia owing to ample supply levels in both regions as well as sluggish global demand from derivatives such as PE, as per ChemOrbis. However, spot ethylene prices in the US gained on the strength of some unexpected production shutdowns. In Asia, spot ethylene prices on a CFR Northeast Asia basis have fallen by US$60/ton over the past week and by nearly US$100/ton since the start of the month. Ample supply levels were cited as the main reason behind the decline in ethylene prices, as steam cracker operators have been operating plants at close to full capacity to take advantage of attractive margins on butadiene production. Strong demand from American buyers has pushed spot butadiene prices up around US$300/ton over the past week. Lackluster PE demand contributed to softer ethylene prices as did a late week decline in crude oil prices, which dropped below the US$100/barrel threshold on the NYMEX on Friday.
In Europe, spot ethylene prices fell by around €45/ton last week due to poor demand from PE producers as well as sufficient prompt supply levels. Some sellers commented that they are planning to stand firm on their current offer levels as they believe that cracker operators will soon begin to lower their run rates given the unfavorable supply/demand balance in the spot ethylene market. On the buyers’ side, a number of PE producers commented that they are delaying purchases as they expect to see additional price declines over the near term, especially given softer spot ethylene demand from Asia.
In the US, spot ethylene prices gained around US$17/ton last week on an FD USG basis as an unexpected outage at Williams’ 544,000 tpa cracker in Geismar, Louisiana limited spot supplies. Players had expected to see spot prices lose some ground last week given poor demand from downstream PE producers along with softening spot prices in other major global markets, with players adding that spot ethylene deals began to lose some ground towards the end of the week. Comparatively healthy ethylene demand in the US has also led some Asian and European sellers to consider the possibility of exporting cargoes to the US market, although US buyers were said to be hesitant about accepting ex-Asia ethylene offers given the long transit time.