Asian PE producers struggling with higher ethylene costs

Spot ethylene prices in Asia have been rising steadily since the start of the new year even as spot PE prices have held largely stagnant in the face of lackluster demand, as per Chemorbis. Many PE producers complain that they are unable to cover their theoretical production costs based on spot ethylene prices as currently spot ethylene is trading at prices close to the prevailing offer levels for HDPE film in China’s import market. Makers of both HDPE film and LLDPE film are operating well below their theoretical breakeven levels based on spot ethylene prices. Spot ethylene prices have risen by US$125/ton on a CFR NEA basis when compared with the first week of January, while offers for HDPE film have posted smaller increases of US$10-25/ton on a CFR China basis and LLDPE film prices have increased by US$10/ton on a CFR China basis on the low end of the range. Despite the increasingly thin spread between ethylene feedstock costs and PE prices, ethylene sellers reported that they are standing firm on their higher offer levels considering the prospect of higher crude oil prices as political unrest spreads through the oil-producing countries of the Middle East and Asia prepares to enter a heavy cracker maintenance season. Despite steadily increasing ethylene feedstock costs, major overseas producers are mostly announcing March PE prices with rollovers to decreases when compared with their most recent February offer levels. Producers who have raised March prices in hopes of covering increasing production costs report to have met with resistance from the buyers’ side. This week, a South Korean producer announced March LLDPE film prices with decreases of US$50/ton when compared with their most recent sell ideas while a Taiwanese producer reduced their March sell ideas for LLDPE film by US$20/ton from their most recent price targets. Late last week, a global producer announced rollovers on their offers for both HDPE film and LLDPE film while a Middle Eastern producer who raised their prices by US$60-70/ton for LLDPE film and by US$50-60/ton for HDPE film complained that buyers have been unwilling to accept their new prices.
  More News  Post Your Comment

Previous News

Next News

{{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