14 July 2010 07:06 [Source: ICIS news]
By Peh Soo Hwee
SINGAPORE (ICIS news)--More ethylene (C2) cargoes are heading to northeast Asia, chasing better prices, as spot values southeast of the region have remained very weak, market sources said on Wednesday.
The arbitrage window was open given roughly a $100/tonne (€79/tonne) differential in market prices of the material coming from the north and from southeast Asia, they said.
“Prices in southeast Asia are very low,” said a source, adding that talks were on to sell a 3,500-tonne spot cargo from ?xml:namespace>
Selling ideas were pegged above $750/tonne on a free on board (FOB) basis, the source added.
This translated to a landed price of close to $900/tonne CFR (cost and freight) NE (northeast) Asia, taking into account the $90 to 120/tonne freight rates to
In the week ending 9 July, two parcels from
Ethylene fell to a near nine-month low of around $885/tonne CFR NE Asia last week partly due to ample supply in Asia, while prices of the monomer hovered close to $800/tonne CFR SE Asia over the same period, according to data from ICIS pricing. Spot prices this week were generally stable.
Some end-users, however, were not interested in ethylene offers of $900/tonne CFR NE Asia and above amid poor business conditions in key ethylene derivatives.
“Our styrene operating rate has been reduced to around 50% and we can get whatever spot requirements we need from the domestic market,” said an end-user based in
Upcoming turnarounds at a number of downstream facilities in
Chinese ethylene oxide producer Sanjiang Chemical Co was slated to shut down its two production lines – with a combined capacity of 130,000 tonnes/year – in Jiaxing for maintenance from the end July or early August, a company official had said earlier.
Some industry players also said ethylene prices in
“PE inventories are very high in
Northeast Asian standalone high density PE margins remained in negative territory and were down $14/tonne to $71/tonne last week, according to ICIS margin data.
The typical breakeven spread between ethylene and PE is around $150/tonne.
($1 = €0.79)
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