Asian ethylene spot prices hit near two-month low

20 May 2010 09:54  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian ethylene spot prices have weakened to a near two-month low of $1,200-1,250/tonne (€972-1,013/tonne) and may drop further due to bearish sentiment on the back of volatile upstream crude values and weak derivative market conditions, sources said on Thursday.

Discussions were heard ongoing at around $1,200/tonne CFR China while some traders that were keeping selling ideas at $1,250/tonne CFR northeast (NE) Asia acknowledged that the buy-sell gap was wide.

“Buying ideas are below $1,200/tonne CFR NE Asia,” said a Japan-based olefins trader.

There was talk that a 3,000-tonne ethylene cargo for second half June arrival could be available for sale as low as $1,150/tonne CFR NE Asia but this could not be immediately confirmed with sellers.

Naphtha cracker operators in Asia are currently enjoying robust variable margins of more than $500/tonne and several market participants have questioned if this was sustainable given the recent weakness in key ethylene derivatives ranging from polyethylene to monoethylene glycol.

The break-even spread for ethylene producers in the region was typically around $250/tonne, market sources said.

($1 = €0.81)

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By: Peh Soo Hwee
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