Ethylene slides on buyer turning away in South East Asian

29 Nov '05

2 min read

Ethylene prices eased slightly lower last week across parts of Asia, owing to lower demand riding on the back of slower derivative PE sector that remained mostly passive.

CFR North Asian offers for ethylene were US $750/mt levels for December, a reasonable prices according to several industry insiders, given that producers of PE could break profits even if they were to offer HDPE for instance at a price of US $950/mt CFR.

A market source said that the existing gap between ethylene offers to North East of Asia, and the South East region needs to shrink.

There is a wide gap existing which is impeding activity in the South East region. Though offers to the region are at the $850/mt CFR levels and above, buyers are seeking cargo at the $780/mt CFR to $790/mt CFR levels, nearer the prices existing in the North East of Asia.

The road ahead the source revealed, which may become an exciting option for traders is an opportunity to send Asian cargo to the US.

Though, at present freight rates remain on the high, traders are wieghing out options carefully while also dealing with certain aprehensions on quality that the US markets perceive about Asian ethylene.

Once convinced, this could trigger a reversal in the slump that the Asian ethylene markets are currently experiencing.

But for now, ethylene continues its bear run in anticipation of a further price drop this week.

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