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Ethylene prices hover around 8-month low

30
Jun '10
In the just concluded week, ethylene spot prices hovered around an 8-month low in Asia. Some traders are of the opinion that, current price level may have bottomed out, as naphtha price was above US $650 / ton (CFR Japan).

After the completion of planned maintenance of some crackers, supply crunch of Asian ethylene has eased, but some local manufacturers say that ethylene prices would fall further, so factories have reduced operating rate. Operational rate of Asia's main cracking plants is 90-100 percent in June.

In the downstream derivatives market, film grade material of high-density polyethylene stabilized at US $1030-1100 / ton (CFR China). Styrene fell by $20-25 to $1,025-1,040 / ton (CFR China). MEG prices fell $5-10 to $715-72/ ton (CFR China).

In Northeast Asia, ethylene spot market in the region fell by $20 to $900-930 / ton (CFR Northeast Asia), the lowest level since October 2009, reflecting the week's transactions and low price level.

It is said that a local cargo of 3,000 tons was sold for US $900/ ton (CFR Taiwan) on Friday for shipment in the second half of July and early August. Earlier in the week, sales intention of local and the Middle East cargoes was at $930-950/ ton (CFR Northeast Asia), but bids from end-users were $900-910/ ton (CFR Northeast Asia).

In the FOB Northeast Asian market, China's ethylene exports were hindered by a large gap between low offers. Purchase intention from traders was $850 / ton (FOB China / Northeast Asia), but manufacturers were unwilling to sell below US $900 / ton (FOB Northeast Asia), due to cost pressure.

On the other hand, dealers said they were not interested in buying high priced cargo, due to depressed CFR market. FOB South Korea spot fell $20 to $870-920/ ton (FOB), showing a large gap between low offers.

In Southeast Asia, ethylene spot prices in the region fell $20-25 to $865-920 / ton (CFR South East Asia), reflecting the price level of transactions and negotiations, as Middle East spot cargoes were sold in the area.

Some traders said sufficient supply from the Middle East and in local market depressed ethylene prices, although businessmen said some cargoes would be shipped to Europe, where prices were higher.

A spot buyer sought cargo for arrival in early July. He purchased 1,000 tons of local supply at $890/ ton (CFR South East Asia) and 3,000 tons of cargo at $864 / ton (CFR South East Asia). Larger shipments are expected to arrive in Indonesia in early July or the second half of July.

Another end-user said they received offers for July shipment at $930-950/ ton (CFR South East Asia), but they chose to wait and watch, as requirements have been met. Purchase intention was $900/ ton (CFR South East Asia).

Fibre2fashion News Desk


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