Ethylene Prices in the Asian Markets Suffer Decline
- 25-Nov-2021 5:15 PM
- Journalist: Yage Kwon
The prices of Ethylene were assessed lower in the Asian markets despite the firm upstream crude and naphtha rates. The reason for the price decline seems to be weaker buying trends in the region coupled with bearish downstream polyethylene demand fundamentals. CFR North-East Asia ethylene prices were assessed at USD 1120 per tonne on Wednesday which showed a drop of USD 15 per tonne from Tuesday’s assessed levels. CFR South-East Asia Ethylene prices were assessed a lower USD 1030 per tonne.
On the supply side, the supply seems to be ample given that Shell’s cracker in Singapore with an ethylene production capacity of 1.15 million tonnes per year which was shut down for a maintenance turnaround in early November has come back online recently. The cracker also has a propylene production capacity of 500000 tonnes per year.
Ethylene is a colourless, flammable, and odourless compressed gas with a pleasant odour. It shows slight solubility in water and in liquid hydrocarbons. It reacts with strong oxidants and can cause fire and explosion hazard. Ethylene is mainly used to make polyethylene. Low density polyethylene and linear low density polyethylene mainly goes into film production for food and non-food packaging. High density polyethylene goes into the blow molding and injection molding applications. Other major uses of ethylene are ethylene oxide, ethylene glycol, vinyl chloride monomer for polyvinyl chloride and styrene. The global demand for ethylene stood at around 150 million tonnes in 2020 and is expected to grow at a CAGR of 3.5% during the upcoming years till 2030.
As per ChemAnalyst, “the prices of ethylene which have fallen on Wednesday are expected to fall for another week till the last week of November as the supply is sufficient and the buying activity remains stagnant. The prices once reach to relatively low levels will tend to stabilize due to buyers looking for stocking up the excess ethylene in the market.”