07 August 2000 00:00 [Source: ICB]
Falling ethylene prices in Europe have firmly closed the arbitrage with Asia.
Although there has been little spot activity to confirm the level of ethylene pricing in Europe, market sentiment is that numbers at the beginning of August were well below $800/tonne cif NWE.
Meanwhile, in Asia prices are around $530/tonne fob Korea and freights for shipments to Europe have softened to around $250/ tonne fob.
Players say European ethylene numbers have softened in spite of a series of cracker problems. This has prompted a number of force majeure announcements from EniChem at Priolo, Dea at Wesseling, AtoFina at Antwerp and BP at Grangemouth. However, most of those problems are now resolved.
Forecasts are that ethylene demand will remain strong until around November when turnarounds in Europe will be complete. Quarter three turnarounds are scheduled to take place at Erdölchemie's Dormagen 4 unit, at Dow Terneuzen and at Atofina's cracker in Gonfreville.
After this, downstream polyethylene markets are expected to exert further pressure on ethylene.
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