Tight supply push Asian ethylene prices to multi months high

As reported in late December 2016, a series of regional crackers are entering maintenance shutdown season during the first quarter of this year, tightening ethylene supply amid healthy demand from downstream derivative plants. The below table showed the maintenance schedule at some major Asia and international crackers:

As a result, ethylene costs based on CFR Northeast Asia term jumped $60/ton on Friday to reach the highest level in four months while Southeast Asia value also increased $30/ton on a single day. Market players believed that the Asian ethylene market might continue to gain ground in the coming days despite the approaching Lunar New Year holiday. A regional player added, “We also heard of some production disruption at couple of methanol to olefins plant in China, which might further burden the supply availability.” And this is creating a strong cost-push factor for ethylene derivatives prices, including PE, the source added.