In the just concluded week, spot market of Asian ethylene was firm amid steadiness, due to strong buying interest from China and rising costs of raw material of naphtha.
The market faced pressures on the week as of December 17, due to price drop of crude oil futures and naphtha, market trend of downstream high-density film grade polyethylene and PVC was unclear.
Naphtha price rebounded in the previous week as being supported by limited stock from the Middle East. Suppliers in Abu Dhabi were said to have provided 1-2 cargoes for shipment in the second half of December, but the cargoes were likely to be shipped to the West, not Asia.
Naphtha price ranged between US $ 865-867 / ton (CIF Japan) on Friday, up $11-12 from the previous week, due to strong demand, while MEG price rose $28-35 to $1053-1065 / ton (CFR China).
In Northeast Asia, ethylene price stabilized at $1170-1200 / ton (CFR Northeast Asia), reflecting the reported level of transaction, offers and bids. Traders say that China's buying interest may still be strong, because factories will make replenishment before the Spring Festival in February.
In addition, a PVC plant with a capacity of 3 million tons / year in Ningbo will start commercial operation in the second half of January and may require ethylene cargo for delivery in the first half of January. Market conditions before the Spring Festival are uncertain and demand is mainly concentrated in the second half of December.
FOB market was lukewarm. Most factories have completed their exports in December, but the negotiation for January cargo has not yet started. A South Korean company offered selling intention at US $1200/ ton (FOB Korea), while buying intention was US $1100/ ton (FOB Korea).
In Southeast Asia, market activity slowed down, as buyer's demand for the first half of January has been met; most traders were buying more competitive cargo from the Middle East.
Thai importers were on sidelines as a domestic cracking plant is expected to end maintenance this weekend.
marketing@alchempro.com
