Asian ethylene prices step back following extended rally

07-May-15

Players in Asian markets report that spot ethylene prices have stepped back a bit this week following a prolonged period of rising prices stretching from the beginning of February up until the end of April, according to ChemOrbis. During the upswing, spot prices on a CFR Northeast Asia basis gained around $550/ton, according to data from ChemOrbis Price Wizard. “The strong upward movement in ethylene prices was mostly due to the heavy cracker maintenance season in South Korea, which should be coming to an end in late May or early June. The anticipated restart of some of the units currently undergoing shutdowns has encouraged some buyers to move to the sidelines,” a market player commented. Buying interest from China was said to be less prevalent in the market these days while other buyers argued that the market had reached a peak and that the time was right for a bit of a correction. The step back in spot ethylene costs also lowered the premium for ethylene over naphtha in Asia, which had risen to record high levels of nearly US$860/ton in late April. According to data from ChemOrbis Price Wizard, the premium for ethylene over naphtha in Asia has come back down to around US$780/ton. However, the current premium of around $780/ton is still significantly higher than the pre-2015 record high of around US$730/ton reported in October of 2014.