SINGAPORE (ICIS)--Spot ethylene prices in southeast Asia are coming under downward pressure from increased supply in the region and the Middle East amid uncertain downstream demand, market players said on Wednesday.
On Tuesday, spot prices stood at $1,120-1,130/tonne CFR (cost and freight) SE (southeast) Asia, down by $10-30/tonne from the previous session.
Sellers have cut their prices given long supply of prompt cargoes due to recent shutdowns of several downstream plants in Singapore and Malaysia.
Strong exports from the Middle East added to the growing supply in southeast Asia.
A producer is offering 9,000 tonnes for end-April loading in the current week, after selling last month around 25,500-27,500 tonnes of March and early-April shipments. Sources attributed the producer’s high inventory to a recent derivative production issue.
Meanwhile, demand from end-users is uncertain as the volatile crude futures and the earlier rapid increases in some derivative prices have impacted the sales of their own products.
“We need to manage our feedstock and product inventory carefully. Sales are not as good as last month,” an end-user said.
The decline in southeast Asia prices has created opportunities for traders to move cargoes to the better-performing northeast Asian market, where supplies have remained limited due to the spring cracker turnaround season and upcoming downstream expansions.
Two southeast Asian cargoes totalling more than 7,500 tonnes for second-half April and early May loading were traded into China.