Petrotahlil - Ethylene prices in northeast Asia have broken the $400/t cfr floor as supply outstripped demand in the region.
A deal concluded at $384/t cfr China on 15 April for May delivery, $44/t below the highest deal in the region on 13 April. Prices were last seen below $400/t cfr northeast Asia in November 2008.
Ethylene prices were seen in a wider range this week at $384-430/t cfr northeast Asia compared with $400-410/t assessed on 8 April. Deals concluded at $400-430/t earlier this week, but fell to $384-390/t on today.
"There are extra cargoes in the market," said a key market participant, referring to the $384/t cfr China deal done this week.
A buyer was heard to have returned cargoes that resulted in additional volumes in the spot market this week but this was unconfirmed. There were talks of cargoes not sold from a week earlier that were also rolled over to this week, adding to the supply and overall pressure on the market.
Sentiment has been extremely weak in Asia on the back of rising supply availability from regional crackers as well as deep sea sources.
Cracker operating rates remained at 90pc and at higher levels on an average in northeast Asia, and were supported by low naphtha prices and the recent increase in co-product propylene prices.
Naphtha prices hovered around $184/t cfr Japan late on 15 April, $200/t below the ethylene deal concluded during the day.
Demand from the key downstream sectors of polyethylene remained weak, with a few producers considering production cuts.
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