Sponsored By

Lackluster polyethylene demand in Europe, Asia; outage pushes ethylene higher in North AmericaLackluster polyethylene demand in Europe, Asia; outage pushes ethylene higher in North America

Ample supply of ethylene coupled with sluggish demand for polyethylene left ethylene prices in Asia and Europe falling last week, according to plastics pricing information service ChemOrbis. In North America demand for PE was slow, too, but an outage at an ethylene cracker in Louisiana caused prices for that chemical to rise.

PlasticsToday Staff

June 14, 2011

2 Min Read
Plastics Today logo in a gray background | Plastics Today

In Asia, spot ethylene prices on a CFR Northeast Asia basis have fallen by $60/ton over the past week and by nearly $100/ton since the start of the month, reports ChemOrbis. Ample supply levels were cited as the main reason behind the decline in ethylene prices, as steam cracker operators have been operating their plants at close to full capacity to take advantage of attractive margins on butadiene production. Strong demand from American buyers has pushed spot butadiene prices up by around $300/ton over the past week. 

Lackluster PE demand contributed to softer ethylene prices, as did the decline late last week in crude oil prices, which dropped below the $100/barrel threshold on the NYMEX on Friday. Oil stood at $102/barrel last week but has fallen by $5/barrel since (as of TU, June 14). Oil prices are down almost 15% since the six-month high of $113.93 in late April.

In Europe, spot ethylene prices fell by around €45/ton last week due to poor demand from PE producers as well as sufficient supply levels. Some sellers told ChemOrbis that they are planning to stand firm on their current offer levels as they believe that cracker operators will soon begin to lower their run rates given the unfavorable supply/demand balance in the spot ethylene market. On the buyers' side, a number of PE producers commented that they are delaying their purchases for now as they expect to see additional price declines over the near term, especially given softer spot ethylene demand from Asia.
 
In the U.S., spot ethylene prices gained around $17/ton last week on an FD USG basis as an unexpected outage at Williams' 544,000-tons/year cracker in Geismar, Louisiana limited spot supplies. According to ChemOrbis, market participants had been expecting to see spot prices lose some ground last week given poor demand from downstream PE producers along with softening spot prices in other major global markets, with some adding that spot ethylene deals began to lose some ground towards the end of the week. 

Sign up for PlasticsToday newsletter

You May Also Like