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 Q1 2020
Asia prices plunged to December 2008 levels due to the coronavirus pandemic that led to a collapse in crude futures and contraction in global chemicals demand. Regional production fell as producers reduced output to align with the weakening downstream activity and following unexpected shutdowns at two major plants.
Asian demand plummeted, with downstream activity severely impacted by hefty declines in crude futures, supply chain disruptions across the globe and significantly weaker orders for finished goods from key markets in Europe and the US. Naphtha-based integrated producers have cut downstream output despite healthy margins, with companies in Japan hard-hit by domestic automotive plant closures. Some key Chinese importers lowered output at their standalone plants to manage inventory amid weak downstream demand.
Supply was lengthy throughout January in spite of a couple of unplanned cracker outages and operational tweaks at various sites to avoid containment issues as exports were unworkable because of the low prices abroad. Cracker feedstock values declined considerably in March, incentivising healthy operating rates and reducing cost pressures for exports. The market was better balanced by the end of the quarter, although pressure was starting to build again after a couple of turnarounds were postponed.
Demand was slow to pick up in January amid what was then the main concern, uncertainties over the US-China tariff spat and the new US polymer capacities. As the coronavirus pandemic evolved, demand was better than expected, and even strong in some cases, for those derivatives with applications in the packaging, medical/sanitary sectors. Concerns over supply chain disruptions due to lockdowns also led some players to build buffer inventory.
US ethylene supplies continued to outpace demand amid historically long inventories and low production costs. Increased cracking capacity and delayed derivative start-ups lengthened supply throughout the quarter. Cracker start-ups added around 2m tonnes/year of ethylene capacity to a market that is already long There was little evidence during Q1 that cracker operators intended to reduce rates on their newly opened facilities, despite falling demand.
Demand for polyethylene (PE) and other ethylene derivatives took a hit during Q1, as manufacturing slowed globally in response to the coronavirus and ongoing economic sluggishness. The Institute of Supply Management’s (ISM) US purchasing managers’ index (PMI) fell in each of the first three months of the year as the virus spread across the globe. Delayed derivative start-ups resulted in less-than-expected demand to start the year.
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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