Spot ethylene peak to four month highs in Asia despite the approaching holidays in China

27-Sep-10

Asian spot ethylene prices reached a four month high on the last working day of last week, as per Chemorbis. Spot prices both in Northeast and Southeast Asia recorded significant increases during this past week while strong demand, triggered by shutdowns, was the main driver behind this rise despite the approaching National Day holiday in China. Last week, spot ethylene prices gained US$90/ton in Northeast Asia and US$50/ton increase in Southeast Asia. These increases in spot prices were attributed to rising buying interest in Taiwan despite the approaching week long National Day holiday in China. Unexpected outages combined with planned maintenance shutdowns have affected the demand for ethylene in Taiwan, while supplies were already known to be limited in the region due to reduced allocations from the Middle East stemming from production issues in that region. Formosa’s No. 1 cracker steam cracker with 700,000 tpa capacity has not resumed operations yet after an explosion occurred on July 7. The company delayed the restart to mid-October from end of September. Meanwhile, Formosa’s 1.03 mln tpa cracker is also to be shut for about 40-45 days for maintenance. The shutdown date was postponed to the middle of October due to the outage at the No 1 cracker. CPC’s No. 5 cracker, located in Kaohsiung, was shut on September 19 as a measure against the Fanapi typhoon. The cracker was planned to be restarted last Friday although no confirmation was gathered by the time of publishing. CPC also plans to shut the No 5 cracker with 500,000 tpa capacity from the beginning of November to the end of December. Idemitsu Kosan will lower their operating rates down to 70% capacity at their 623,000 tpa ethylene plant in Japan between September and October. KPIC (Korea Petrochemical Ind. Co) will also halt their operations for about a month in the first week of October at their 460,000 tpa ethylene plant in South Korea. SK Energy will implement a maintenance shutdown at their 660,000-690,000 tpa cracker in South Korea for a month, starting at the first of October.