ICIS Ethylene price reports are covered weekly in Asia, Europe and US and also daily in Asia. Reports include analysis and market intelligence on contract and spot prices, margins, production issues, upstream and downstream news and any other influencing factor that is impacting price movements at that given time. In addition to weekly reports there are also margin reports for each region.
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Updated to Q4 2020
Northeast Asia’s supply tightened amid production outages. Korean producer LG Chem’s Yeosu unit shut unexpectedly following a fire in early November, while fellow Korean producer Yeochun NCC (YNCC) extended a turnaround at its No 2 unit because of a construction workers’ strike. In Japan, ENEOS Corp took down one of its units in early December for repairs. The regional capacity losses totalling over 400,000 tonnes/year coincided with a closed west-east arbitrage window.
Spot demand from Korean and Japanese producers surged due to a slew of production outages. Korean producers YNCC and LG Chem sought cargoes for cargoes delivery in November and December to meet the production needs of their downstream units. Japan’s ENEOS Corp went to the spot market to cover its commitment to term customers in China and Taiwan. However, restocking activities in China and Taiwan were curtailed by weak downstream margins and tight supply.
Ethylene supply tightened considerably during Q4, bucking the usual seasonal trend. A succession of cracker issues alongside planned and longer-running outages – one Swedish cracker restart was later earmarked for end December – cut availability across Europe. Producers had intentionally short-planned given the usual low inventory expectations for year end. The tightness saw spot prices at a premium to the prevailing contract price for the first time in three years.
Demand was much better than expected and across all derivatives. Offtakes were maximised which goes against traditional expectations for the year end. Inventories down the chains were low. Some derivative production was limited by the lack of ethylene feedstock. Derivative demand was supported in part by its more competitive cost position relative to Asia which boosted exports in some sectors.
Supply loosened in Q4 as crackers ramped up production following a period of widespread outages caused by an unusually active Atlantic hurricane season. With most turnarounds slated to begin in the following year, operating rates were higher to end 2020. Upstream, supply of feedstock NGLs continued to be ample, particularly as drilling activity increased in response to rising crude oil prices.
Demand into principal derivative PE continued to grow in Q4 despite the recession in the larger economy, as the polymer was heavily exposed to the booming consumer non-durables market. Shifts in consumer behaviour in response to the pandemic have resulted in a boost to packaging demand in particular. Low inventories downstream following a period outages also amplified demand, as did strong consumption in Asia.
We offer the following regional Ethylene analysis and news coverage to keep you informed of factors and developments affecting prices in the Ethylene marketplace.
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Ethylene is the starting point for so many chemicals that have such an impact on our daily lives from polyethylene (PE) used in packaging, pipes through to ethylene glycol (EG) used in polyester and antifreeze.
Europe’s ethylene landscape has been more fluid and dynamic over the past two years than ever before. The advent of low oil prices in Q4 2014 led to record cracker margins, strong demand, and increased operating rates, which in turn was considered a factor in the unprecedented number of production problems in 2015.
Prices usually track crude oil and naphtha market developments very closely but the supply and demand situation can play a large part in determining contract and spot prices because of the challenges inherent in producing, transporting and consuming a gas.
European contract prices hit a bottom of €810/tonne in March 2016 but have been on a steady uptrend for the most part since then, gaining 16% largely on the back of a string of planned – and sometimes unplanned – cracker production issues.
European spot price developments over the past year have been tumultuous, falling about 21% in the first quarter, rising again by almost 30%, and then settling back as supply has eased
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 is anexplosion hazard..
Ethylene Asia Margin Report Methodology
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – Ethylene Asia report.
Ethylene China Margin Report Methodology
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – Ethylene China report.
Ethylene Europe Margin Report Methodology
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin –Ethylene Europe report.
Ethylene US Margin Report Methodology
The main method of ethylene manufacture is by the thermal cracking of hydrocarbons. Both gaseous and liquid hydrocarbon feedstocks are used in the US, so this report examines two typical models.
Ethylene is a colourless, odourless, extremely flammable compressed gas with a faintly pleasant odour. It is slightly soluble in water and soluble in liquid hydrocarbons. It reacts with strong oxidants causing fire and explosion hazard.
Ethylene is mainly used to make polyethylene (PE). Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) mainly go into film applications such as food and non-food packaging, shrink and stretch film, and non-packaging uses. High density polyethylene (HDPE) is used primarily in blow moulding and injection moulding applications such as containers, drums, household goods, caps and pallets. HDPE can also be extruded into pipes for water, gas and irrigation, and film for refuse sacks, carrier bags and industrial lining.
Other major uses are ethylene oxide (EO), ethylene glycol (EG), vinyl chloride monomer (VCM) for polyvinyl chloride (PVC) and styrene.
Other derivatives include linear alpha olefins (LAO), detergent alcohols and plasticiser alcohols, vinyl acetate monomer (VAM), and various intermediates such as ethyl acetate and ethyl acrylate.
Ethylene is produced commercially by the steam cracking of a wide range of hydrocarbon feedstocks.
In Europe and Asia, ethylene is obtained mainly from cracking naphtha, gasoil and condensates. The cracking of ethane and propane is primarily carried out in the US, Canada and the Middle East.
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