Players: Asian ethylene market plunged; Chinese buyers might resume buying

The Asian ethylene market plunged $30/ton on Thursday, 30 August 2018 as the presence of spot cargoes from Southeast Asia, Middle East and Taiwan add pressure on the already fragile market.

Industry sources reported seeing offers for 9,000 tons of ethylene originated from Saudi Arabia for late September loading and 20,000 tons from major Taiwanese operator for early October loading.

“The ethylene market has been under a lot of pressure from the sluggish downstream PE sector and the sudden influx of these spot parcels just crash the main support from the tight supply condition,” an industry source said. 

Players also reported that negative margins in the PE market have encouraged producers in Thailand to lower operating rate, leading to surplus ethylene supply here. “We do expect to see these cargoes to emerge in the export market,” another market source added.

However, players are not expecting the downtrend to sustain as Chinese buyers might soon returning for replenishment in fulfilling the supply gap as a result of major maintenance shutdown in the domestic ground.

In fact, both Fujian Refining and Chemical Co and Shanghai Secco are embracing 50 days maintenance shutdown at its cracker during October and November period, which potentially affect local availability.