Spot ethylene values in Asia are on the decline for a second consecutive week, dipping from 17 month highs of US$1400/ton amid weak derivative demand, raising concerns of a sustained price downtrend, as per ICIS. This week, offers for H2-Feb/March arrival spot ethylene fell to US$1300-1320/ton CFR Asia as compared to deals concluded at above US$1350/ton CFR Asia in the week ending 5 February.
Late January saw CFR NE Asia prices spike to US$1400/ton on tight supplies from the Middle East and Asia. However, the unyielding ascent of monomer values took a toll on key derivative sectors of polyethylene (PE), vinyls and monoethylene glycol (MEG), forcing production cuts at downstream plants. PE makers saw negative margins, hence it was not possible for ethylene to continue at such high levels due to lack of support from PE. Integrated HDPE margins fell by US$12/ton week-on-week to US$467/ton last Friday but stand-alone margins have remained in negative territory since December 2009 and were at minus US$173/tonne in the week ending 5 February.
Deterioration in buying momentum from China ahead of the Lunar New Year holidays (14-19 February), has also arrested ethylene’s price amid increased supply from the Middle East. A 4,000-5,000 ton ethylene cargo from Abu Dhabi, UAE for 10-15 March loading was offered early last week. An increased availability of cargoes is expected from Rabigh, Saudi Arabia amid talk of production issues at a 600,000 tpa linear low density PE (LLDPE) plant in the country, that will render surplus ethylene availability. Estimates peg this month’s ethylene exports from Rabigh at 10,000 tons.
Sellers were banking on a heavy cracker turnaround schedule in 2010 (please see table below) to support ethylene prices but this could be offset by the emergence of new plants such as the start-up of Shell Chemicals’ 800,000 tpa naphtha cracker in Singapore in Q1-10, with annual ethylene exports of 150,000 tona. In China, more than 2.5 mln tons of new ethylene capacities are expected to come on stream in 2010, bringing down import volumes
| Month | Company Name | Location | Capacity (t) | Turnaround dates |
| Feb | PTT Chemical | Mab Ta Phut, Thailand | 460,000 | mid-Feb for 35 days |
| | Sanyo PC | Mizushima, Japan | 470,000 | mid-Feb for mid-Apr |
| | ExxonMobil | Jurong Island, Singapore | 900,000 | mid-Feb for 2 wks |
| Mar | CNOOC-Shell | Huizhou, China | 800,000 | early Mar for 2 mths |
| | Showa Denko | Oita, Japan | 675,000 | 13 Mar - 26 Apr |
| | Tosoh Corp | Yokkachi, Japan | 527,000 | 14 Mar - 16 Apr |
| | LG Chem | Yeocheon, Korea | 900,000 | 3 Mar - 8 Apr |
| Apr | BASF-YPC | Nanjing, China | 600,000 | Apr-May |
| May | Keiyo Ethylene | Chiba, Japan | 740,000 | 11 May to 17 June |
| | YNCC | Yeocheon, Korea | 400,000 | 17 May to 20 June |
| Jun | Mitsui | Osaka, Japan | 450,000 | 17 Jun to 26 Jul |
| | Mitsubishi | Kashima, Japan | 375,000 | 8 May to 26 June |
| | PTT Chemical | Mab Ta Phut, Thailand | 515,000 | 30 days |
| Jul | Mitsubishi | Kashima, Japan | 453,000 | 17 May to 12 Jul |
| Aug | Tonen | Kawasaki, Japan | 515,000 | 1 mth (TBC) |
| | Yangzi Petchem | Nanjing, China | 650,000 | 1 mth (TBC) |
| Sep | Formosa | Mailiao, Japan | 1,030,000 | Sep-Oct |
| Oct | YNCC | Yeochen, Korea | 850,000 | 4 Oct to 2 Nov |
| | SK Energy | Ulsan, Korea | 690,000 | 4 Oct to 2 Nov |
| | Maoming | Maoming, China | 380,000 | around 30 days |
| | Titan | Pasir Gudang, Malaysia | 400,000 | 1 mth (TBC) |
| | CPC | Linyuan, Taiwan | 385,000 | mid-Oct to H2 Nov |
| Nov | Rayong Olefins | Mab Ta Phut, Thailand | 800,000 | TBC |
| Dec | | | | |
12-Feb-10 
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