Ethylene prices remain under pressure in Asia, Europe; US rebound gains momentum

Grappling with oversupply and thin demand, Asian and European ethylene markets have been easing slowly but steadily since the beginning of the second quarter despite all-out efforts to manage supplies. The US market, on the other hand, has been remaining firm since early this year, with the rally gaining momentum particularly since May.

CFR China prices near a-year-low

ChemOrbis Price Wizard suggests that spot ethylene prices on CFR China basis fell by $130/ton since their peak in early March. The current levels at $830/ton suggest the lowest prices since August 2023.

Ethylene prices have been under downward pressure although cracker operators have been applying disciplined rate cuts in a bid to counterbalance slowing demand with excess supplies. Their efforts seem to have slowed down the slump in prices rather than avoiding it completely.

Besides, producers are facing extra pressure from ex-USG ethylene shipments of traders to China. The consistent arrival of these deep-sea ethylene deliveries since May has also contributed to the downward pressure on spot ethylene prices.

China-Southeast Asia gap at its highest level

Meanwhile, the loss on CFR Southeast Asia basis was relatively smaller at $80/ton in the same period with current spot prices at $940/ton standing at their lowest level only since late January this year.

The gap between the two markets has also widened to their highest level since 2018, when ChemOrbis started tracking SEA-based ethylene prices. This was driven by Southeast Asia facing successive shutdowns at major regional crackers.

However, crackers including Indonesia’s Lotte Chemical Titan, Malaysia’s Chandra Asri, Philippines’ JG Summit and Vietnam’s Long Son Petrochemical have returned and/or are gradually returning, exerting extra pressure on SEA-based ethylene prices.



European ethylene down by €200 since March peak

Similar to Asia, the spot ethylene market has been weighed down by lethargic demand, which has been creating an oversupplied market. Producers have been running their crackers at lower rates for more than two years while a braver solution - rationalization - seems inevitable for the European market under highly competitive conditions.

Following the sharp increase in the first two months of the year, spot prices on FD NWE basis hit their highest level of the past one year. This has been followed by a steady softening trend since then with prices losing €200/ton in total. Despite the prolonged downturn, current levels at around €730/ton are still above levels seen at the beginning of the year.

US ethylene market bucks the overall trend

Unlike Asia and Europe, the US ethylene market has been firming up steadily since the beginning of the year, disregarding some weekly drops.

The rally has particularly gained momentum since May with planned and unplanned outages tightening supplies. Current spot prices at $540/ton FD USG display a cumulative increase of $150/ton since early 2024, with more than half of this increase occurring in the past one and a half month.

According to ChemOrbis Production News Pro, Sasol’s Lake Charles cracker has been shut since late March due to a fire. Westlake and Formosa are having planned maintenance shutdowns at their respective crackers in Lake Charles and Point Comfort while ExxonMobil’s Baytown crackers, Ineos’ one of two crackers in Chocolate Bayou and Chevron Philips’ two crackers in Sweeny and Port Arthur have been undergoing unplanned outages.

US ethylene hits 21-month highs

Current spot prices also represent the highest prices reached since September 2022, according to ChemOrbis Price Wizard. This rally also coincides with the gains in Henry Hub natural gas prices in the US, considering that regional crackers are largely ethane-based.