28 December 2009 04:37 [Source: ICIS news]
By Peh Soo Hwee
SINGAPORE (ICIS news)--Asian ethylene spot prices are poised to hit fresh highs in 2010, underpinned by prevailing tight supply in the region and from the Middle East, market players said on Monday.
A heavy cracker turnaround schedule in the new year was also expected to lend support to the market although how much more prices could climb would depend on the key derivative polyethylene (PE) sector, they said.
An estimated 22 crackers in the region would be shut for maintenance next year compared with 15 facilities that were taken off line in 2009.
Snug supply saw ethylene prices reaching 15-month highs of $1,160-1,200/tonne (€812-840/tonne) CFR (cost and freight) northeast (NE) Asia this month and key cracker operators in Asia were expected to run their facilities at full steam into the new year.
“In January, we plan to run our crackers at 100%,” said a company official from ?xml:namespace>
Olefins traders have set their sights on breaching the $1,200/tonne CFR NE Asia mark for remaining January spot shipments while buying ideas hovered at lower levels of $1,150-1,170/tonne CFR NE Asia, market players said.
In southeast Asia, discussion levels were at higher levels, buoyed by limited supplies from
“There are no cargoes from
Traders had earlier estimated that the country’s ethylene exports in 2009 would fall to 400,000-450,000 tonnes from 680,000-700,000 tonnes in 2008.
Other market participants, however, raised concerns that the narrowing spread between ethylene and PE prices may cap gains for the monomer.
“If you look at supply, we have every reason to be bullish but there is some concern on the resin side, whether the PE sector can still continue to accept such high ethylene prices,” another trader said.
The polymer sector had maintained a healthy spread of $200-300/tonne with ethylene prices for most of the year, although the gap had narrowed to less than $100/tonne by late December as certain grades such as high density PE (HDPE) were last assessed at $1,220-1,280/tonne CFR China on 18 December, according to data from global chemical market intelligence service ICIS pricing.
($1 = €0.70)
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