In the context of constant hike of international oil prices, plus the reports of unexpected production cut from China, India, and some countries in Southeast Asia, ethylene and propylene prices in Far East continue to rise this week. Ethylene price has increased to US $1,600 per ton, nearly up $100 per ton, propylene price also promoted to $1,750 per ton, up $85 per ton.
Industrial insiders point out that Chinese Sinopec is actively raising refining capacity in order to cope with domestic demand for the Olympics. The company increases production by about 200,000 tons, resulting in reduction of 65,000 tons of ethylene and 32,500 tons of propylene in June, thus creating a gap in market supply.
As light oil price rises, some petrochemical plants in Southeast Asia have also cut ethylene production, resulting in price rise of ethylene and propylene. Ethylene price has increased from $1,495 - 1,505 per ton to $1590 – 1600 per ton; propylene price has improved from $1655-1665 to $1,740 - 1,750 per ton.
In fact, the production reduction by Chinese petrochemical does not only affect the supply of ethylene and propylene, but also the affects the production of downstream products. Coupled with the explosions in China's Maoming power plant and in the petrochemical plant in India, prices of five general-purpose plastics substantially increased last week, which include ABS, LLDPE, HDPE, and PP. All of their prices have increased to US $1,800 per ton.
The industry experts do not expect that the prices are difficult to return to normal level in coming days.
Fibre2fashion News Desk - China
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