Despite lower energy prices for most of last week, spot ethylene and propylene prices in Asia followed a steady to slightly firmer path following relentless decreases earlier in June, as per ChemOrbis. Stable to higher offers were driven by supply concerns stemming from Taiwanese Formosa Petrochemical’s unexpected cracker outages in Mailiao.
By the middle of last week, Taiwanese major Formosa Petrochemical had to shut its No. 2 and No.3 crackers in addition to the aromatics units at its refinery and petrochemical complex in Mailiao owing to a power outage in the region. The producer’s No.2 cracker has a capacity of 1.03 mln tpa of ethylene and 515,000 tpa of propylene, while the No.3 cracker can produce 1.2 mln tpa of ethylene and 600,000 mln tpa of propylene. At the end of the week, company sources reportedly stated that they were planning to restart the crackers in a week.
Despite lower energy prices during much of last week, the news from Formosa caused supply concerns among players in global markets and kept spot ethylene prices mostly steady and even caused a slight increase in offers to Northeast Asia. Spot ethylene costs rose by US$25/ton week on week, in the region, says ChemOrbis. Nevertheless, spot ethylene costs are still US$70/ton below the levels in early June. Some market sources commented that increased demand from Taiwan supported the ethylene market. Spot propylene prices were also unchanged during the period with values being reported just slightly higher compared to the previous week, with market sources pointing to stability in the downstream PP market as another supportive factor for the propylene market. Meanwhile, spot propylene costs still indicate a US$25/ton loss with respect to the levels in the beginning of this month.
Looking at the upstream chain, crude oil prices on Nymex for August delivery cargoes lost more than four dollars a barrel, in a week, while Brent oil prices on London-based ICE Futures Europe exchange plunged by over US$6/barrel during the period although they showed some rebound at the end of last week. In Asia and Europe, spot naphtha prices declined nearly US$60/ton on both a CFR Japan and CIF NWE basis in a week, as per ChemOrbis. |
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