Despite yo-yoing crude oil prices, ethylene prices in Asia strengthen

18-Dec-09

Crude oil prices markets have been volatile in the month of December, swinging between US$68 and US$72. Naphtha prices also reacted in line with crude price movement sashaying between US$720 and US$680 in the same time frame. Despite yo yoing oil and naphtha prices in the past few weeks, ethylene prices continue to strengthen in Asia. As compared to prices documented in early part of last month, ethylene prices in Asia rose by almost 200 dollars in December. Restricted supplies in the region are mainly responsible for this rise. Avails in the region have been limited on reduced supplies from Iran, the largest Middle East supplier of ethylene to Asia. Throughout 2009, Iran’s crackers have been running at 50-60% run rates due to lack of gas feedstock and a recent sudden shutdown of Marun Petrochemical’s 1.1 mln tpa cracker. Ethylene exports from Iran have plunged in 2009 to about 450,000 tons from levels less than 700,000 tons in 2008. Also, supplies are limited as Asian markets are yet to feel the impact of the new capacities coming up in the Middle East.