Spot ethylene, styrene inch up in Asia

05-Dec-13

In Asia, spot ethylene and styrene prices gained some ground on the week despite a weaker energy complex, as per ChemOrbis. Crude oil futures on the Nymex remained below the US$95/barrel threshold on November 29 due to higher US crude stockpiles after falling by 3.8% during November, the largest monthly drop since January 2009. Despite softer crude, spot naphtha prices on a CFR Japan basis remain mostly steady from last week. Spot ethylene prices climbed US$10-20/ton compared to last week on a CFR Northeast Asia basis while remaining stable on a CFR Southeast Asia basis. Spot prices in the South Korean market also moved upward by US$15/ton on the week. Short supply stemming from reduced output in the region was cited as the reason behind firmer prices. In addition, ethylene shipments from South Korea were reduced ahead of a number of scheduled maintenance shutdowns in 2014. Taiwan’s CPC reduced the operating rate of its 720,000 tpa No 6 cracker at Linyuan from 100% to 95% towards the end of November, citing their higher stock levels for propylene. The company’s 385,000 tpa No 4 cracker has been offline since October 10 for a 90-day turnaround. China’s Fujian Refining & Petrochemical’s 800,000 tpa cracker is also undergoing a maintenance shutdown which started in the middle of October. Restart is slated for mid-December. Meanwhile, China’s Sinopec Shanghai Petrochemical mothballed its 150,000 tpa naphtha-fed cracker in Jinshan, according to market reports. After slightly softening during the past week, spot styrene prices changed direction at the beginning of this week in line with firmer benzene costs. Spot benzene prices have climbed by around US$40/ton on an FOB Korea basis owing to firmer demand and relatively reduced benzene availability following the pipeline explosion in Qingdao, China on November 22. Meanwhile, several players voiced their expectations of seeing a pick-up in demand for styrene at the beginning of 2014. In capacity news, Japan’s Sumitomo Chemical is expected to finalize the acquisition of its joint venture partner LyondellBasell’s 40% stake in Nihon Oxirane in December, according to ChemOrbis. The company is planning to end manufacturing and sales activities of styrene from Nihon Oxirane by the end of May 2015. Nihon Oxirane is able to produce 425,000 tpa of styrene at its plant located in Chiba, Japan.