Ethylene carries premium over propylene in Asia, trades at discounts in US
Players attributed much of this gap to the feedslate difference between Asian crackers, which are predominantly naphtha-based, and American crackers, which generally use ethane feedstock. Ethylene production costs are higher for naphtha crackers relative to ethane crackers, putting upward pressure on Asian ethylene prices, while ethane based crackers feature lower propylene coproduct ratios relative to naphtha crackers, a contributing factor pushing up propylene prices in the US.
In Asia, spot ethylene prices on a CFR Far East Asia basis have been carrying a consistent premium over propylene prices on an FOB Korea basis since the start of 2013. The size of this premium has reached record heights over the past year, with the premium remaining above $400/ton for much of the past year while hitting an all-time record of around $550/ton in March. The premium presently sits above the $450/ton threshold.
In the US, meanwhile, spot ethylene prices on an FD USG basis have been trading with a discount relative to propylene prices for the past few years. The premium carried by spot propylene prices over ethylene had risen to as high as $220/ton earlier in 2016 before narrowing to around $100/ton in the past few weeks.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- China’s local PVC market retreats from 8-month high
- Initial June PE offers to SEA signal firming despite buyers’ resistance
- Firming in ethylene lags behind propylene in Europe
- PET rally stalls in China after prices hit four-and-half-year high
- Asian PS retains firming path on supportive upstream
- June PE outlook under discussion in Europe
- Taiwanese major lowers June PVC offers to Asia despite firm China
- Local PP markets cautiously firmer in Vietnam, Indonesia
- Global ethylene prices continue to defy energy rally
- China’s import polyolefin markets up on soaring crude, futures