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Shipping Container Scarcity Cripples Asian Supply Chains, Ethylene Cargoes Appear to be Long Way Off

Shipping Container Scarcity Cripples Asian Supply Chains, Ethylene Cargoes Appear to be Long Way Off

  • 24-Nov-2021
  • Journalist: Jung Hoon

As the terrible phase of the shipping industry owing to acute shortage of containers continues to extend its wrath with each passing day, the trade of petrochemical olefins in the Asian region gets botched leaving the producers to stare into the abyss.

Asian ports are seen laden with stranded cargoes coming from the United States, Europe, Oceania, and Africa. Singapore port has become a common dumping spot for cargoes, which is intensifying the container backlog issue across the intra-Asia trade route due to the chain effect. The cargo backlogs are causing the imports of ethylene to slim down in Asia. While the ethylene exporting companies find themselves helpless as they are struggling to send shipments on time, thereby failing to take advantage of the firm olefin demand across the Asia Pacific and the regions in the west.

Ethylene is the most notable petrochemical product obtained from oil and natural gas feedstocks upon their thermal cracking. It is widely used as a feedstock for the preparation of a chain of industrially important polyolefins which are extensively exploited in the packaging sector, automobile industry, construction, electronic items, pharmaceuticals, paints and coatings, textiles, rubber production etc.

As per ChemAnalyst, the container crisis is weighing down heavily on the ethylene and related petrochemical spot trading amid the strong-going ethylene demand specifically in the Asia-Pacific region. The crisis is causing the producers and suppliers to lose profit margins. With delayed shipments and soaring freight charges added to the production cost, the downstream sectors are struggling to capitalize on low ethylene supplies at affordable prices. Furthermore, the scenario is becoming catastrophic for small producers who are at risk of getting forced out of business as the market faces a bleak future.

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