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The Asian ethylene market has been struggling to maintain the stable trend on the final week of 2018 and starts 2019 on a soft note. In fact, the first three trading days of the year saw $60/ton reduction in ethylene prices in both Northeast Asia and Southeast Asia region. 

Comfortable supply is to blame for the rapid deterioration in prices, sources said. Industry players informed that spot cargoes are widely available in Southeast Asia while Saudi Arabia producers are opening tender for the second half of January loading.

“The Asian ethylene market might gain some support from South Korean cracker shutdown during the first half of 2019. However, the market balance might turn lengthy toward the second half,” a source commented.

In fact, both LG Chem and Hanwha Total are planning 30-45 days shutdown at their naphtha crackers in March, which would curtail export allocation from this country. Looking at the second half of the year, new capacity startup would introduce fresh pressure to the market.

“We are looking forward to seeing some purchases from Chinese buyers before the Lunar New Year. Building stocks ahead of the long holiday have become a tradition. This would help to suspend the current downtrend,” another source added. 

By the week ending 4 January 2019, ethylene based on CFR Northeast Asia fell to $870/ton while CFR Southeast Asia reached $760/ton. 

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North Korea (NEA)