15 December 2010 05:42 [Source: ICIS news]
By Felicia Loo and Heng Hui
For January, top energy user China is expected to reduce spot ethylene imports to possibly 4,000-5,000 tonnes, following a hefty purchase of 10,000 tonnes or more for December delivery to plug a domestic shortfall, they added.
“Ethylene demand is down [in
Prices of ethylene - the basic petrochemical building block - were assessed at $1,150-1,170/tonne (€863-878/tonne) CFR (cost and freight) Northeast (NE)
Reflecting a weakening market, Asian polyvinyl chloride (PVC) prices were expected to drift lower due to the softening domestic prices in
Plus, with the upcoming long Chinese Lunar New Year holidays in early February, buyers could defer their purchases until after the holiday. As a result, demand for January PVC cargoes were expected to be weak, they said.
Furthermore, news that China had met its energy saving and emissions reduction targets, led to market players’ beliefs that the power rationing policy would be relaxed or even stopped by the end of the year.
This would lead to increased chlor-alkali operating rates, which would result in an excess supply of PVC from
In the mid term, Chinese demand for ethylene might also be dampened by trial methanol-to-olefins (MTO) plants in China such as Shenhua Baotou , traders said.
Asian methanol prices eased to $370-400/tonne
Chinese methanol prices had fallen from a high of around $415/tonne CFR China in mid November to around the $370/tonne CFR China levels last week on weak demand, particularly in the dimethyl ether sector, traders said.
Moreover, the bearish mood in the Asian ethylene market was being compounded by expectations of additional supply coming from
However, the market could seek solace from a recent cracker outage at a Japanese ethylene producer that might put a lid to price loss, traders said.
“The shutdown may have a peripheral impact,” said a trader. “Market players are uncertain about ethylene so they are likely to buy on a floating basis for next month.”
Additional reporting by Aaron Cheong
($1 = €0.75)
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