Asian ethylene values dip amid coronavirus impact

Ethylene spot prices in northeast Asia have fallen to their lowest level in more than 11 years amid the continued impact of the coronavirus outbreak on demand.

Spot ethylene prices fell to $450-500/t cfr northeast Asia this week, $50-60/t below prices last assessed on 25 March. This is the lowest since December 2008 when prices were last below $500/t cfr northeast Asia levels.

Selling indications for late April and May shipments were at $500/t cfr China today, while buying ideas were cited at $450/t. Buyers are cautious this week because of the steady downturn in crude futures in the past month, while demand from downstream sectors remains weak in key markets like China and Taiwan.

The market has been on a steep downturn with a 45pc fall in ethylene values from $865/t cfr northeast Asia on 28 January. The plunge in ethylene prices by $390/t in the past two months follows the impact of the coronavirus outbreak in China and other key regional markets.

The shutdown in parts of China in February and partly in March to stem the coronavirus outbreak, followed by restrictions in other countries, has resulted in slowdown in demand from derivatives sectors. Downstream markets like ethylene glycol and polyethylene have reduced production rates at plants in recent months.

Cracker production rates have held up mostly at about 90-95pc after seeing some falls at the end of last year and into January.

By Mahua Chakravarty