Ethylene costs in Asia surged, supply might normalise as crackers restart

Ethylene costs in Asia surged more than $100/ton over the past week as availability become limited while downstream demand is healthy. Most ethylene derivatives, including polyethylene (PE), PVC, Mono Ethylene Glycol (MEG) and styrene monomers (SM) are enjoying healthy margins, which boosted buying interest.

Players expected that the firming trend might persist in the near term, just that the extent might be softer. Several crackers are restarting after maintenance schedule, which might ease the current tightness to some degree. These crackers are shown in the following table:

“Besides, the downstream PE market is loosing steam as buyers are not willing to accept higher prices, which might put some constraint on the upstream ethylene market. Many PE producers have not been able to lift offers on the same pace as ethylene, hence we think market is heading for stabilisation,” a market source commented.

Other are having opposite opinion pointing to the fact that spot ethylene offers in the market are rather limited at the moment while demand from downstream markets might continue to improve as the traditional peak season is around the corner.