Imported Data – Ethylene Chemical Industry

Imported Data

Ample supplies pressure Asia ethylene

Cracker run rates may be cut amid weaker margins

Imported Data of Asian ethylene – dropped $10/mt day on day Friday to three-month lows, dragged down by persisting heavy supplies. Northeast Asia market has dropped by a total of $40/mt since April 18, while Southeast Asia marked a $25/mt decline. S&P Global moved forward publishing its weekly assessments to Friday from Friday last week due to a public holiday in Singapore (Imported Data). Asian ethylene market sentiment remained bearish this week, dragged down by weak demand from end-users amid negative ethylene derivatives margins. Asian monoethylene glycol margin was reported to be poor with margins calculated at around minus $130-$140/mt this week, S&P Global Imported Data showed. On top of that, spot ethylene supplies are also heavy as an additional 12,000-13,000 mt of spot ethylene is seen to be available from Iran following a gas pipeline accident there, market sources said. The sources said Chinese traders were interested in taking Iran origin cargoes, but no fixture was heard so far due to difficulty in finding vessels. As a result, deal done levels reported in the market fell to $950/mt CFR NE Asia later this week from $970/mt (Imported Data) earlier. On the other hand, a decline in SE Asia ethylene market was limited on a week-on-week basis as some spot demand emerged for polyethylene production. A PE/ethylene spread was calculated at plus $175/mt Friday — based on SE Asia ethylene price — which is higher than a typical breakeven spread of $150/mt, Imported Data showed. Upstream, Asian naphtha market continued to climb this week to a six-month high, data showed. As a result, Asian ethylene/naphtha spread has been narrowing quickly to a five-month low of around $330-$340/ mt, the Imported Data showed. The spread is lower than a typical breakeven spread of $350/mt. Some market sources said steam cracker operators — especially in Southeast Asia — would start considering reducing their plant operations amid narrowing margins.

Rationale

CFR Northeast Asia ethylene price slid $10/mt (Imported Data) day on day to be assessed at $950/mt Friday with the latest deal reported done at $950/mt CFR NE Asia. Meanwhile, CFR Southeast Asia ethylene price dropped $10/mt to $890/mt during the same period in line with the bearish NE Asia market (Imported Data).

Imported Data
Imported Data

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