NE Asia ethylene hits two-month low on ample supply

SINGAPORE (ICIS)--Northeast Asian ethylene spot prices fell below $1,000/tonne (€720/tonne) to their lowest levels in two months, weighed down by ample supply from the region and the Middle East, market sources said on Friday.

Bid-offer discussions to purchase a 3,000-5,000 tonne spot cargo of unspecified origin for second-half November arrival were at $960-980/tonne CFR (cost and freight) Taiwan, they said.

“We see further downward pressure on prices due to spot availability from the Middle East,” said an olefins trader in Mandarin.

Producers in Abu Dhabi and Saudi Arabia had issued tenders during the week to sell ethylene cargoes of around 4,000-5,000 tonnes each for November lifting, he said. The tenders were expected to close 31 October, the trader added.

Meanwhile, China had some November shipments for sale but discussions were largely on a formula price basis, and not based on fixed prices, according to other market participants.

The bulk of the ethylene plants in the region continued to run at high rates of 90-100% this month despite rising spot naphtha feedstock prices at above $770/tonne CFR Japan and shrinking margins for Asian cracker operators, according to data from ICIS.

($1 = €0.72)