Deep-sea ethylene imports weigh on Europe spot prices
Nel Weddle
18-Oct-2013
LONDON (ICIS)–Ethylene cargoes from Mexico and the US
arriving in November are putting downwards pressure on
European spot prices, market sources said on Friday.
At least two cargoes – totalling about
8,000-9,000 tonnes – are loading in October in Mexico bound
for Europe. The cargoes were due to load on the
vessels Gaschem Caribic and Stina Kosan,
according to sources.
Prices for these
volumes were between
$1,350-1,380/tonne (€999-1,021/tonne) CIF (cost, insurance,
freight) NWE (northwest Europe). At least one of the cargoes
was made available because of a derivative – namely ethylene
oxide (EO) – maintenance shutdown.
European ethylene spot prices were
assessed in the low to mid-$1,400s/tonne CIF NWE in
mid-September.
Around 16,000-16,5000 tonnes of US material has also
been fixed for Europe, sources said. A 12,000 tonne parcel
– possibly on the Navigator
Saturn – was sold at about $1,300/tonne CIF NWE, or at
about $1,070/tonne FOB (free on board) US and its arrival is
due at the end of November.
Another parcel of about 4,400 tonnes was understood to have
been fixed – possibly on the Gaschem
Nordsee – at a level of $1,250/tonne CIF NWE. Neither of
these deals were confirmed.
A glut of ethylene in the Texas system because of
operational issues on the Evangeline pipeline, which usually
moves ethylene from Texas to Louisiana, is behind the US
fixtures.
With some sources saying that the pipeline is not expected to
run at full rates until the end of the year or the start of
2014, there is the potential for more cargoes to be seen
ex-US.
Timing is an issue of course – the rapidly approaching
year-end generally brings inventory and capital
considerations to the fore, leaving buyers very cautious
regarding pricing.
The timing and volume of these imports is
leading some sources to assume that cracker operators will
soon be trimming back cracker operating rates, particularly
once the maintenance turnaround season comes to an end by
mid-November.
However, no cracker operators have as yet
confirmed any plans to reduce rates.
($1 = €0.74)
Follow Nel on
Twitter
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.