06 October 2013 09:04 [Source: ICIS news]
By Nel Weddle
LONDON (ICIS)--European olefins players will be hoping that the stabilty experienced so far this year will continue and confidence will improve further as they gather this weekend at the 47th annual European Petrochemical Association (EPCA) meeting in Berlin.
This year has not seen the swings in price which was such a feature of 2012. That year was described as a rollercoaster, because of the hyper-cautious approach to inventory levels amid heightened volatility in the upstream crude oil and naphtha markets.
Players had lost patience with the constant volatility and wished for more stability in 2013, even if the same issues such as a lack of visibility and uncertainties over the global economy remained.
This wish appears to have been granted.
In 2013, the worst months were March-May – somewhat surprising as a heavy turnaround season was in full swing but demand was very much under pressure.
The ethylene contract lost €160/tonne ($216/tonne) in that period. For three months of this year, the contract price rolled over and in one month an increase of just €5/tonne was applied.
Compare this to 2012, when the ethylene contract price lost an unprecedented €310/tonne over May-July only to recover €265/tonne by September.
The propylene contract price movement mirrored that of ethylene.
This year if anything has proved to be a little dull for some players.
“I’ve heard all along this year – its going to be quiet until the third quarter and then it’s the end of the year,” a trader said.
Another trader said: “Regardless of the debt crisis and instability in the Middle East, Europe has been quite stable."
It added that it hoped it would hear stable outlooks from other players during its meetings with other market players in Berlin.
“In principle, the economy is not that bad, it's improved through the year and there doesn’t seem to be much looming over Europe, it’s a slow pace but is an improvement,” the first trader said.
“But,” it added, “I still don’t know what to expect for 2014.”
Other topics for discussion that will certainly crop up at EPCA this year will focus on the 2014 cracker shutdown schedule, which is so far looking much thinner than this year’s heavy slate.
It is still unclear whether there will be any more announcements from producers regarding definitive shutdowns of other small and uneconomical crackers – Versalis, Total, Repsol announced changes to their olefins systems this year.
Another question that will be repeated this year, as it has since 2011, will be when can the market expect the Libyan cracker at Ras Lanuf to come back online.
Last year a market observer said “nobody expects healthy, the best we can expect is stability.”
Now it looks like the market is hopeful for a bit of healthy alongside the stability.
($1 = €0.74)
Follow Nel on Twitter
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections