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Ethylene spot firms up in previous week
Sep '10
Market valuation of Asian ethylene spot firmed up in the just concluded week. Consultation level of shipment of cargo in second half of October was higher, due to slowdown of supply in Northeast Asia.

Formosa Petrochemical delayed restarting operations of its number -1 cracker, due to higher level of negotiation price, offers were strong, but transactions were scarce, traders said it was not because of higher offers, but limited supply.

Sales intention went up to US $1100-1150 / ton (CFR Northeast Asia), but purchase intention was around $1,000 / ton (CFR Northeast Asia).

Some traders were still outside waiting and watching, and are expected to make offers after, a better picture of the situation of Formosa cracker is revealed in the next few weeks. Meanwhile, cargo supply from the Middle East is limited.

One trader had said earlier that, there are 12 ships, each carrying 4500-5000 tons of Iranian ethylene cargo, of which, two ships are headed for Western Europe, 10 ships are destined for Southeast and Northeast Asia. In addition, another 3 ships will go to Taiwan and China. He also added by saying that, there are still more, unsold cargoes.

According to experts, the spot prices may have reached the upper limit, because naphtha prices have declined and demand from European buyers has reduced, as well as, derivatives prices are basically stable.

In the last week, downstream derivatives market was generally higher. MEG price is expected to remain strong at $793-803/ ton (CFR China), up $3 from the closing price of its previous week.

But PVC price was stable at $950-970 / ton (CFR China) and high-density film grade polyethylene remained stable at $1120-1170 / ton (CFR China).

In the Northeast Asia market, stock price rose $10-20 to $1000-1040 / ton (CFR Northeast Asia). Prices also rose for cargoes for arrivals in the second half of October, due to strong buying interest, limited stock and lack of firm offers.

China's domestic demand remained strong. Purchase intention was $1000 / ton (CFR China). However, the market will slow down during the Mid-Autumn Festival holiday and National Day holiday period.

Some derivatives manufacturers in East China and North China are maintaining operating rates at between 60-90 percent, as a result of power restriction by Government.

Negotiation for FOB price of South Korean cargo was light, due to stock shortage. Purchase intention was $1000 / ton (FOB Korea). Price range was estimated to narrow to $980-1000 / MT (FOB Korea).

In Southeast Asia, spot price rose by $10 to $950-980 / ton (CFR South East Asia). Sales intention was $1000 / ton (CFR South East Asia), October supply of spot cargoes was limited.

In the FOB Southeast Asian market, although a local company sold a single October cargo at $1,050 / ton (FOB Southeast Asia) in the previous week, sales intention was still around $900 / ton, level.

Fibre2fashion News Desk - India

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