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The Asian naphtha market surged to multi-year high level on Tuesday, 7 November 2017 on the back of strong energy complex. CommoPlast data showed that naphtha based on CFR Japan term last touched the $600/ton threshold on 3 December 2014 and might remain on the firming trend if the current trend in crude oil prices proved to be sustainable.

Strong upstream costs have cushioned the downstream ethylene market partially, steering prices higher just after a brief reduction seen since late October. Ethylene based on CFR Northeast Asia term jumped $40-50/ton from last week to reach 1290/ton on Wednesday, 8 November 2017. Industry experts are seeing limited room for further hike, citing that downstream PE producers would cut back on production rate to protect profit margins, leading to possible weaker demand. However, at the moment, healthy buying interest from Chinese buyers might keep market firm.

A market source added, “Besides, we are seeing diminishing ethylene availability, especially deep-seas cargoes. Downstream PE market is mixed, yet styrene monomer has been steadily firming up over the past several session, which appears to be a positive indication for ethylene market.”

In related Plant Status news, four major crackers with combined ethylene capacity of more than 3.5 million tons are scheduled to shutdown throughout the period from October 2017 to January 2018, which might cause supply to be thinner. These plants are listed in the following table: