Global ethylene prices post sharp increases
In Europe, spot ethylene prices skyrocketed by €135/ton on FD NWE basis during last week. The recent values stood €185/ton above early July levels. Last week’s noteworthy increase in ethylene offers was attributed to strong buying interest for prompt cargoes from PVC makers in the region, some sources said. Rising spot values are expected to lift new ethylene contracts, which create bullish expectations for August in the market.
Another driver behind the surge was restricted availability from regional crackers. Repsol’s cracker in Portugal has been offline since early May, while the company has yet to declare a certain restart date, according to market sources in Europe. The company had shut the 410,000 tons/year cracker in late May for maintenance and planned to restart it in early June before it delayed the date due to some technical issues. In addition, Dow Chemical hasn’t restarted its 675,000 tons/year cracker located in Tarragona, Spain. The cracker was taken down in end May for a scheduled maintenance, while the company is expected to restart it by around July 20, sources reported.
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In Asia, vivid buying interest from China pushed spot ethylene costs up by $80/ton on CFR Northeast Asia basis week over week. Demand is foreseen to remain strong this week, market sources commented, due to upcoming cracker shutdowns. Chinese Sinopec Yangzi Petrochemical was to start a maintenance shutdown at its No.2 cracker in Jiangsu at the start of this week. The cracker which produces 350,000 tons/year of ethylene under normal circumstances is expected to resume operations after 45 days.
In the US, spot ethylene costs jumped at the end of last week supported by the news about lower operating rates at Ineos’ side. The company reportedly cut the rates at its Olefins 2 unit located at Chocolate Bayou as part of its plans for testing and upgrades. The unit can produce 875,000 tons/year of olefins. Following this development, spot ethylene offers rose around 6.1 cents/lb ($135/ton) on FD USG basis when compared to the previous week.
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