Spot ethylene prices in Asia at four year highs

06-Jan-14

In the first week of 2014, spot ethylene prices on CFR Northeast Asia basis crossed US$1500/ton- peaking to their highest levels in almost four years, according to data from ChemOrbis Price Wizard. This indicates around US$30/ton increases when compared with the previous week. Tight supply levels in Asia are the main reason behind these recent hikes despite the ongoing holiday lull in the region. Some major players in Japan are still repored to be away from their desks in the past week due to the New Year holiday. Looking at China’s import PE market, with the exception of LDPE film prices, offers for PE including LLDPE film, HDPE film and blow moulding are below the theoretical PE production costs based on the current spot ethylene prices. According to ChemOrbis Price Indexes, the average import LLDPE film price in China is US$70/ton below the current theoretical PE production costs. Meanwhile, HDPE film prices are US$110/ton and HDPE blow moulding prices are US$175/ton below the theoretical costs. In China’s PE market, general expectancies are about mostly steady market levels for January. Although demand is likely to slow down gradually given the approaching Chinese New Year, strong upstream costs are to support sellers on their firm offer levels.