Asia’s Ethylene Poised for Upward Price Revision Amid Supply Tightness Due to Delayed Start-Ups
Ethylene prices gained in the Asian markets on account of tight product availability due to scheduled plant turnarounds across the region. Persistent manpower shortages, Polyethylene demand slowdown, supply glut in China and weak economy due to the prolonged Covid-19 lockdowns seem to be the key reasons for the delayed start-up of the new polymer facilities in Asia. China’s Formosa Petrochemical Corporation (FPCC) shut its Taiwan based No. 3 Ethylene cracker in mid-August for a maintenance turnaround which is expected to remain non-operational till September-end this year. The company’s No. 3 cracker has Ethylene production capacity of 1.2 million MT per year and Propylene production capacity of 600,000 MT per year. CFR North East Asia Ethylene prices tend to firm up by USD 10 per MT to USD 795 per MT levels on Friday. Amidst market uncertainties, Philippines' JG Summit has also postponed the start-up of its new 250,000 tpy high-density polyethylene (HDPE) unit from late 2020 to Q3FY21. Malaysia's Pengerang Refining and Petrochemicals which turned off operations at its polymer units due to explosion in April, is expected to postpone the start-up of its polymer units from Q4 2020 to Q1 of 2021.CFR SEA Ethylene prices were assessed hovering around USD 740 per mt levels last week. Extending feedstock gains, India’s Reliance Industries Ltd. also announced a sharp uptick in its Polyethylene prices. Price for LLDPE Extrusion grade and High Flow Grade LLDPE were revised upwards by USD 27 per MT respectively, w.e.f. 10th September.