Ethylene

Ethylene is a colourless, odourless, extremely flammable compressed gas. It is slightly soluble in water and soluble in liquid hydrocarbons. It reacts with strong oxidants causing fire and explosion hazard. It may polymerise to form aromatic compounds under the influence of temperatures above 600°C.

Around 59 percent of the world’s ethylene demand is consumed in polyethylene production. Other major derivatives are ethylene oxide/glycol (13 percent), ethylene dichloride/vinyl chloride monomer (13 percent) and ethyl benzene/styrene (six percent), with other uses such as acetaldehyde, alpha-olefins, ethylene-propylene elastomers and vinyl acetate representing around nine percent of demand.

Although ethylene gas poses no risk to skin or eyes, the ethylene liquid can cause frostbite. Ethylene is a dangerous fire and explosion hazard. Exposure to ethylene occurs through inhalation, from leaks, spills, accidents, and cigarette smoke. While ethylene gas is invaluable due to its ability to initiate the ripening process in several fruits, it can also be very harmful to many fruits, vegetables, flowers and plants by accelerating the ageing process and decreasing the product quality and shelf life.

ICIS pricing quotes ethylene in Europe, Asia-Pacific and the US Gulf.

Frequency:

Published weekly on Fridays.

Real time Price Alert Service (PAS) delivering market news and trends throughout the day.

Ethylene (EUROPE)

Weekly Price Assessments:

Ethylene Contract Prices

FD NWE quarterly (EUR/MT & conversion to US CTS/LB)

FD NWE bi-monthly (EUR/MT & conversion to US CTS/LB)

Ethylene Spot Prices

FD NWE PIPELINE (EUR/MT & conversion to US CTS/LB)

CIF NWE (EUR/MT & conversion to US CTS/LB)

CIF MED (EUR/MT & conversion to US CTS/LB)

Feedstock – Naphtha Spot Prices

CIF NWE (USD/MT)

Ethylene (ASIA-PACIFIC)

Weekly Price Assessments:

Ethylene Spot Prices

FOB KOREA (USD/MT & conversion to US CTS/LB

CFR N.E.ASIA (USD/MT & conversion to US CTS/LB)

CFF S.E.ASIA (USD/MT & conversion to US CTS/LB)

Feedstock – Naphtha Spot Prices

CFR Japan (USD/MT)

Ethylene (US GULF)

Weekly Price Assessments:

Ethylene Net Contract Prices (FOB):

Pipeline monthly (US CTS/LB & conversion to USD/MT)

Ethylene Contract Prices (FOB)

Pipeline monthly (US CTS/LB & conversion to USD/MT)

Ethylene Spot Prices (FOB)

Pipeline weekly (US CTS/LB & conversion to USD/MT)

Feedstock – Naphtha Spot Prices

DEL USG PARAFFINIC (USD/MT)

General Information:

Assessment window: Price assessments are based on information supplied by market participants through the week up to close of business on Fridays at 1800 hours in London, Singapore and Houston.

Specifications: Price quotes are provided on the basis of product of 99.9% purity. The European FD PIPELINE quote is for ARG specification.

Timing: In Asia and Europe, business is usually concluded within a six week forward delivery window from date of publication however given arbitrage movements a maximum forward delivery window of 60 days applies for the quotations. In the US, contract prices are tied to the delivery month referenced next to the price. US spot prices are quoted for one-to-two weeks out.

Terms: 30-90 days after bill of lading date.

Standard cargo size: Typical cargo sizes in Asia range from 2,300 to 3,000 tonnes. Typical European cargo sizes range between 2,000 and 5,000 tonnes. US domestic deliveries are typically sold in 5-10 million lb parcels via pipeline. Imported cargo sizes can be up to 4,000-5,000 tonnes.

Assessment basis: ICIS pricing ethylene price assessments are based on information gathered throughout the week from producers, traders, end-consumers and the shipping market. The assessment takes into consideration: confirmed deals, reported deals, firm offers and bids, buy and sell indications, and rumoured deals.

All efforts are made to confirm pricing levels with the respective buyer and seller before price assessments are adjusted. In the absence of confirmation and/or trades, price ranges may be adjusted at the discretion of the editor on a notional basis to better reflect levels at which trading activity could take place. Consideration is also given to all factors potentially influencing the price of ethylene at any given time, including supply/demand information; feedstock prices and derivative market prices.

In Europe, contract prices are fixed on both a quarterly and a bi-monthly basis. Contracts are negotiated between producers and consumers. The bi-monthly settlement reflects business for the month indicated and the subsequent month, so APR* covers April and May.

It is understood that ICIS pricing price assessments are often used as a benchmark for spot/contract ethylene trades, on an ICIS pricing average +/- alpha basis. As a result special emphasis is given to ensuring that the ICIS pricing average spot price is a number that can be readily agreed upon by as wide a cross-section of the market place as possible.

Netback calculations (i.e CFR prices derived from FOB numbers + freight) are not usually considered sufficient to warrant an automatic adjustment of CFR assessments on the basis of open market freights. The use of COA vessels in Asia-Pacific and the need for employment can lead to below-market freight components to apply. ICIS pricing prefers to adjust assessments on a like-for-like basis, CFR for CFR, FOB for FOB. Similarly southeast Asian price assessments are not adjusted on northeast Asian prices + freight component, or vice versa.

The Asia-Pacific report focuses on the regional spot market, however information on domestic contract pricing and prevailing formulae is carried in the text, where details are available. Northeast Asia comprises Japan, Korea, Taiwan and China, while southeast Asia comprises the Philippines, Thailand, Malaysia, Singapore and Indonesia.

In the US, contract deals are traditionally done by pipeline within the US Gulf Coast area. These are monthly prices typically settled within the month listed. The net contract price is confirmed by a wide range of players from the buy and sell side of the market. The net contract price is reported to reflect more closely the monthly contract transaction price, given the accepted practice of discounting from the contract price. The contract price represents a benchmark price level and excludes all discounts. The higher contract price was acknowledged as a benchmark only, but was not seen as representative of market pricing. US ethylene spot prices are on a FOB basis and represent confirmed business, bid/offer levels or general sentiment.

Printer Friendly