Spot NWE ethylene prices reach 9-month high

Nel Weddle

06-Jun-2014

LONDON (ICIS)–Spot ethylene prices have risen to a nine-month high this week on a combination of improved demand, volumes being committed for export and then finally the psychological effect of the as yet unclear impact of the explosion at the Shell Moerdijk, Netherlands site, market sources said on Friday.

Spot ethylene prices had already been steadily firming over the course of the past couple of weeks largely in an attempt to keep pace with feedstock naphtha gains in May and improve on poor margins.

Earlier this week 1,700 tonnes changed hands at €950/tonne FCA (free carrier) on the pipeline, but late Thursday 3,000 tonnes was heard done at €1,065/tonne FCA pipeline. The first deal was fully confirmed by both buyer and seller, but there was no confirmation from the selling side for the second deal. The same buyer was involved in both deals.

“I have plenty of requests for volumes and I can’t supply,” one producer said, adding that this was the first time in a long while that this had been the case.

“Everyone is calling us, instead of us calling them,” it said.

Other producers echoed this sentiment.            

“It [the ethylene market] has turned quite rapidly. Instead of having to push tonnes, we are having to push people away, “ a second producer said.

Other producers said that together with the good, seasonal demand and the volumes committed for export, they had no flexibility to accommodate requests.

However, sources were unclear whether the €1,065/tonne level would stick.

“I don’t believe this will be the new floor, perhaps up to €1,000/tonne will be more feasible,” the first producer said.

Sources said that the current situation showed that the widely-held assumption that European ethylene would always be in plentiful supply and available at cheap levels was not foolproof.

“It may be only once or twice a year, but it goes to show you cannot rely on spot exposure alone,” the first producer said.

Follow Nel on Twitter

READ MORE

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

Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.

Want to learn about how we can work together to bring you actionable insight and support your business decisions?

Need Help?

Need Help?