SEA propylene slips on lengthening supply; NEA ethylene edges up
by Jennifer Lee - jlee@chemorbis.com
Asian ethylene and propylene prices in Southeast Asia have diverged this week, with spot ethylene prices ticking higher due to short covering by a key trader. Spot propylene prices in Southeast Asia have been pressured by heavy selling by Malaysia’s Pengerang Refining and Petrochemical (PRefChem) for October loading, traders commented.
PRefChem reportedly sold multiple spot propylene cargoes of sizes between 2500 to 5000 tons, to be loaded or shipped every week in October. The producer was heard to have sold mostly on a floating-formula price based on CFR Southeast Asia weekly averages, offering discounts of $30-40. The total volume sold for October loading amounted to more than 30,000 tons, noted a Western trader.
Meanwhile, a key Japanese trader was rumored to have bought ethylene spot cargoes at higher levels in the spot market, to cover their short positions in China and Southeast Asia for second-half October delivery. The CFR China spot ethylene cargo was heard transacted at $890/ton CFR while the CFR Southeast Asia ethylene cargo was reportedly bought at $900-920/ton CFR. Traders believe that these were exceptional deals however and said the November market is relatively balanced.
For November, there is some pressure on Asian propane spot prices, which are backwardated to October levels by $30-35/ton. Asian propane spot prices for November had slid to $660/ton CFR Japan. Asian naphtha prices also slipped $20/ton, to $700/ton CFR Japan. Traders are monitoring propane spot prices to see if further slippage may push CFR NEA/China spot prices lower.
Spot ethylene prices edged up $10/ton from last week to be assessed at $890/ton CFR China and at $900/ton CFR Southeast Asia as of October 4. Spot propylene prices were stable in Northeast Asia to be assessed at $870/ton CFR China but slipped $10/ton in Southeast Asia to $850/ton CFR SEA as of October 4.
Nghi Son refinery to restart in late Oct; PCS also restarted in mid-Sept
Southeast Asia’s reduced cracker and PDH operating rates have kept the region’s supply tight-to-balanced, and bolstered olefins prices. Due to ongoing pressure on production margins, regional producers have maintained lower operating rates since the start of 2023, and some have also extended maintenance turnarounds.
The restart of Nghi Son refinery and Singapore’s PCS will lengthen supply in October. These restarts will, however, still be balanced by other crackers which will be going into maintenance turnarounds or are in extended shutdowns. Rayong Olefins’ cracker, located at the Map Ta Phut Olefins (MOC) complex. will be taken down in mid-November for about two months of scheduled maintenance turnaround. The cracker produces 900,000 tons/year of ethylene and 450,000 tons/year of propylene.
Vietnam’s refinery operator, Nghi Son Refinery and Petrochemical (NSRP) began its first major maintenance on August 25. The refinery is in the midst of a 55-day maintenance shutdown, and will restart in late October, according to the Ministry of Industry and Trade. The refinery produces up to 400,000 tons/year of propylene and has an integrated PP unit with 400,000 tons/year capacity.
Additionally, Singapore’s PCS also restarted its 515,000 tons/year No 1 ethylene cracker, located in Jurong Island in mid-September. The cracker had been taken down for a 40-day maintenance turnaround in June and was slated to restart in mid-July, but the shutdown was extended.
S. Korea’s LG Chem to restart cracker No 2; YNCC to extend cracker shutdown to end Dec
Similarly, LG Chemical will likely restart its Yeosu-based 800,000 tons/year No 2 ethylene cracker in late October, traders commented. The cracker had been shut since early April and initially was slated to remain in extended shutdown due to poor margins, through to end December, traders added. Traders said there are no specific reasons given for the earlier restart date but reiterate that production costs have remained high for most producers.
On the other hand, YNCC will likely extend the current maintenance shutdown at its Yeosu-based 470,000 tons/year No 3 cracker to end December, according to industry sources. The cracker had been shut since August 18.
PRefChem reportedly sold multiple spot propylene cargoes of sizes between 2500 to 5000 tons, to be loaded or shipped every week in October. The producer was heard to have sold mostly on a floating-formula price based on CFR Southeast Asia weekly averages, offering discounts of $30-40. The total volume sold for October loading amounted to more than 30,000 tons, noted a Western trader.
Meanwhile, a key Japanese trader was rumored to have bought ethylene spot cargoes at higher levels in the spot market, to cover their short positions in China and Southeast Asia for second-half October delivery. The CFR China spot ethylene cargo was heard transacted at $890/ton CFR while the CFR Southeast Asia ethylene cargo was reportedly bought at $900-920/ton CFR. Traders believe that these were exceptional deals however and said the November market is relatively balanced.
For November, there is some pressure on Asian propane spot prices, which are backwardated to October levels by $30-35/ton. Asian propane spot prices for November had slid to $660/ton CFR Japan. Asian naphtha prices also slipped $20/ton, to $700/ton CFR Japan. Traders are monitoring propane spot prices to see if further slippage may push CFR NEA/China spot prices lower.
Spot ethylene prices edged up $10/ton from last week to be assessed at $890/ton CFR China and at $900/ton CFR Southeast Asia as of October 4. Spot propylene prices were stable in Northeast Asia to be assessed at $870/ton CFR China but slipped $10/ton in Southeast Asia to $850/ton CFR SEA as of October 4.
Nghi Son refinery to restart in late Oct; PCS also restarted in mid-Sept
Southeast Asia’s reduced cracker and PDH operating rates have kept the region’s supply tight-to-balanced, and bolstered olefins prices. Due to ongoing pressure on production margins, regional producers have maintained lower operating rates since the start of 2023, and some have also extended maintenance turnarounds.
The restart of Nghi Son refinery and Singapore’s PCS will lengthen supply in October. These restarts will, however, still be balanced by other crackers which will be going into maintenance turnarounds or are in extended shutdowns. Rayong Olefins’ cracker, located at the Map Ta Phut Olefins (MOC) complex. will be taken down in mid-November for about two months of scheduled maintenance turnaround. The cracker produces 900,000 tons/year of ethylene and 450,000 tons/year of propylene.
Vietnam’s refinery operator, Nghi Son Refinery and Petrochemical (NSRP) began its first major maintenance on August 25. The refinery is in the midst of a 55-day maintenance shutdown, and will restart in late October, according to the Ministry of Industry and Trade. The refinery produces up to 400,000 tons/year of propylene and has an integrated PP unit with 400,000 tons/year capacity.
Additionally, Singapore’s PCS also restarted its 515,000 tons/year No 1 ethylene cracker, located in Jurong Island in mid-September. The cracker had been taken down for a 40-day maintenance turnaround in June and was slated to restart in mid-July, but the shutdown was extended.
S. Korea’s LG Chem to restart cracker No 2; YNCC to extend cracker shutdown to end Dec
Similarly, LG Chemical will likely restart its Yeosu-based 800,000 tons/year No 2 ethylene cracker in late October, traders commented. The cracker had been shut since early April and initially was slated to remain in extended shutdown due to poor margins, through to end December, traders added. Traders said there are no specific reasons given for the earlier restart date but reiterate that production costs have remained high for most producers.
On the other hand, YNCC will likely extend the current maintenance shutdown at its Yeosu-based 470,000 tons/year No 3 cracker to end December, according to industry sources. The cracker had been shut since August 18.
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