Spot ethylene prices, CFR Northeast Asia, are currently trading with their highest premium over spot propylene on FOB South Korea basis since 2008, the latest date for which data is available, as per ChemOrbis Price Wizard.
Spot ethylene prices have carried a premium over propylene prices for all of 2014, in marked contrast to previous years in which propylene prices tended to trade above ethylene in Asian markets. Ethylene’s premium over propylene varied between US$50-150/ton during the first seven months of the year, and rose to US$260/ton in September falling below US$100/ton in mid-November. However, propylene prices have been falling at a much faster rate than ethylene for the past several weeks and the premium broke a fresh record at the start of the current week by moving above the US$300/ton threshold.
Players attribute these sharp losses in spot propylene prices to ample supply in Asia as well as declining energy costs. Sources commented that falling propane prices were making margins more attractive for propane dehydrogenation (PDH) plants in China and that the operators of these plants have subsequently increased their operating rates. China has reportedly added around 3 mln tpa of new propylene capacity in H2-2014, according to ChemOrbis Production News, while India and South Korea are planning to add another 1.5 mln tpa of new propylene capacity between 2014 and 2016.
18-Dec-14 
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