In the third week of February, the Asia Pacific market sentiments rebounded strongly after the arbitrage flourished post a week-long Lunar New Year holiday, and the futures for several commodities witnessed a significant boost. Although, the Chinese authorities kept the operational rates at a lower level amidst the ongoing Winter Olympics in China. In addition, the ongoing market sentiments were further coupled with the shutdown in the No. 3 cracker of the South Korean Petrochemical giant YNCC’s. In response, it levied its impact on the prices of Ethylene and Propylene in the Asia Pacific market.

South Korea’s Yeochun Naphtha Cracking Center has declared force majeure on its No.3 naphtha-fed steam cracker in Yeosu after an explosion on 11th February, the shutdown is for a week but there are uncertainties regarding the length of the shutdown which may extend further. The declaration of force majeure constrained the availability of Ethylene in the Chinese domestic market. The Chinese traders rushed to ensure the availability of adequate volume. As a ripple effect, the offers for Ethylene Oxide witnessed a surge of 6% on a week-on-week basis as the demand is healthy due to the improving operational loads in China.

As per ChemAnalyst, it is previously anticipated that the offers for numerous downstream commodities will decrease proportionally with the improving loads in the Chinese manufacturing sites. Although such development in the market movement will likely push the inflated prices further for the commodities. Whereas, in the third week the CFR Northeast offers crossed the USD 1200 per tonne market after the prices soared by + USD 20 and + USD 5 per tonne in the Southeast region along with CFR Southeast ranging between USD 1190-1200 per tonne.