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 Q2 2020
Supply for June and July delivery cargoes fell short of demand amid output constraints. Major producers in Japan and China cut or halt supply to customers as their plants were undergoing maintenance. The supply crunch was exacerbated by a prolonged outage at South Korean producer Lotte Chemical’s Daesan plant, which shut in early March following a fire accident, and production problems at ENEOS Corp’s unit.
China’s import demand improved in line with a resumption in downstream activity after the coronavirus outbreak in the country was bought under control. Restocking was also boosted by the restart of downstream plants in April and May on the back of improved margins and following the completion of scheduled maintenance. However, downstream margins came under renewed pressure in June, prompting some buyers in China and Taiwan to cut output.
Scheduled cracker maintenances at two sites were postponed from the spring to later in the year because of coronavirus concerns. Crackers ran well on the whole despite some disruptions downstream. Supply lengthened significantly but exports afforded by low feedstock costs helped to manage balances. Spot prices were significantly below the prevailing contract reference prices as a result. Towards the end of the quarter, cracker rates in some areas were constrained by poor C4s performance.
Demand for ethylene derivatives involved in the packaging and medical/hygiene sectors was boosted by the coronavirus pandemic, but the construction and automotive sectors did not fare so well. Demand in these areas fell significantly in April, but while buying interest in the construction sector saw a steady recovery in May and June as lockdowns across Europe began to ease, there was a limited pickup in the automotive sector.
Supply was mostly steady in Q2 following Q1 2020 and Q4 2019 capacity increases. Despite the demand shock from the coronavirus, cracker operators did not substantially lower rates. Increased ethane cracking due to other feedstocks’ unfavourable economics resulted in greater ethylene production. Upstream drilling cuts in response to plunging crude prices raised some concern among participants about constrained feedstock supply, but such constraints did not materialise.
Demand for most ethylene derivatives was muted to begin Q2 with widespread shutdowns across the US economy. Consumer spending, construction and manufacturing have been slow to recover. Declines in these sectors were too steep to be offset by rebounding export and PE demand, which have been buoyed by higher demand for food packaging, personal protective equipment (PPE), medical supplies and cleaning chemicals.
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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