Focus article by Nel Weddle
LONDON (ICIS)--European ethylene spot prices are holding steady reflecting a largely balanced market, players said on Friday.
Spot pipeline deals recorded fixed this week have held within a 3-5% contract price discount range that has been in place since the end of June, although it does seem that the tendency has been more towards the higher end of this range this week.
This is because “there is a bit more availability,” according to one source, adding that some of the earlier problems had been resolved and that crackers were also able to run harder, now that high temperatures were less of an issue.
“Big crackers are running at high rates, there are no unplanned issues,” a second source said.
Additionally, an unexpected hiccup at a derivative unit this week saw some tonnes being pushed back into the spot market, but sources said this was likely only a short-term issue.
Otherwise, demand was robust and had been within expectations for September.
Some sources said they now expected little change from the current status quo through to the end of year.
The traditional year-end de-stocking for working capital purposes might not happen or at least could be limited in its scope, some sources said.
“We’ve not yet had the communique that they [derivatives] will reduce stocks at year end, the second source said.
This is thought to be because concerns over ethylene availability in the first and second quarters of 2017 – and especially within the March-May time frame – due to a heavier planned cracker turnaround slate – might override any other considerations, general confidence in European cracker reliability still being at a low ebb given events over the past 18 months.
Time will tell.
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