Based on the data collected by SSESSMENTS.COM, ethylene price has broken a new threshold level. On June 10, ethylene price on CFR Northeast Asia basis broke above $800/ton-threshold, captured at $803-809/ton. In the past month, ethylene prices have increased between $349-351/ton on CFR Northeast Asia basis and between $319-321/ton on CFR Southeast Asia basis. Over a day interval, on June 10 ethylene price rose by $54-56/ton on CFR Northeast Asia while CFR Southeast Asia between $49-51/ton.
As SSESSMENTS.COM noted, there are several factors supporting the upward trend in ethylene prices in the Northeast Asia region. Firstly, the improved market sentiment as production at downstream factories continue to increase following the relaxation of lockdown restrictions across China. Secondly, production rates at local PE producers in China reportedly continue to improve as well, and not to mention the firm PE offers from local producers amid relatively limited domestic supply, especially from the leading polyolefins producers in the country. Thirdly, the firmer energy market also plays a role in supporting the upswing in ethylene prices. Over a month, naphtha price has increased by $111/ton, captured at $351/ton on CFR Japan basis on June 10. Likewise, crude oil prices maintained firm and believed not to retreat back to negative territory again in the days to come amid hopes for the extended production cuts from OPEC and its allies. On June 6, OPEC+ agreed to extend the record supply cut for another month until the end of July, slashing oil supplies by 9.7 million barrels per day (bpd). By June 10 settlement, Brent crude benchmark captured above $40/barrel-level, increased by $0.55/barrel to $41.73/barrel for August contract, doubled since falling to a 21-year low below $16/barrel in April. On the same day, NYMEX recorded an increase of $0.66/barrel, captured at $39.60/barrel for July contract.
A series of turnaround maintenance at cracker units also supported ethylene prices to remain firm. According to SSESSMENTS.COM plants’ database, Sinopec SABIC Tianjin Petrochemical Company (SSTPC) shut its naphtha cracker for maintenance purposes on May 9, 2020. Located in Tianjin, China, the cracker with a production capacity of 1 million tons/year of ethylene and 540,000 tons/year of propylene, is scheduled to remain shut for about two months. BASF-YPC Company Limited has also shut its naphtha cracker on April 30, 2020, and is expected to remain under maintenance until mid-June, 2020. Located in Jiangsu, China, the cracker has a production capacity of 750,000 tons/year of ethylene and 400,000 tons/year of propylene. Japan’s Mitsubishi Chemical Corporation shut its naphtha cracker for turnaround maintenance since May 9 and is scheduled to be back on-stream at the end of June 2020. Located in Kashima, Japan, the cracker can produce 540,000 tons/year of ethylene and 270,000 tons/year of propylene.
