Spot ethylene prices climb to 3-month high in Asia
The energy complex was buoyed by an optimistic sentiment triggered by efforts of oil producers to stabilize crude oil markets. Producers, including Saudi Arabia and Russia, stated that they were ready to negotiate on an output freeze, although it remains as a question mark whether oil majors will be able take real action or not.
NYMEX crude oil futures surged by around $4/barrel week over week, while they represented a spike of more than $8/barrel from August 1.
Bullish energy costs sent spot naphtha costs up above the $400/ton threshold on CFR Japan basis by mid-August. Meanwhile, the recent spot naphtha values jumped $40/ton week over week while they were up by $50/ton from the beginning of the month.
Source: ChemOrbis Price Wizard
Consequently, ethylene costs in the region climbed by $20/ton on CFR Southeast Asia basis while they indicated a cumulative gain of $35/ton from early August. Spot ethylene prices posted a larger increase of $60/ton on CFR Northeast Asia basis on the week. The cumulative hike was $65/ton from early August.
Apart from soaring crude oil and spot naphtha markets, players also blamed tight availability as the reason behind the rising ethylene market as several crackers are reported to be offline since July and August. Japanese JX Nippon Oil & Energy has been conducting a scheduled turnaround at its 404,000 tons/year cracker in Kawasaki since July. The shutdown is slated to end in September.
By end July, Taiwanese Formosa Petrochemical shut its 1.03 million tons/year No.2 cracker in Mailiao for a maintenance to last 50 days. In China, Sinopec Sabic Tianjin Petrochemical’s cracker has been undergoing a turnaround since early August. The 1 million tons/year cracker is located in Tianjin and planned to resume operations in late September. There are some scheduled cracker shutdowns in South Korea and Japan to start next month, according to players in Asia.
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