Petrotahlil - Asia's spot ethylene prices have fallen to the lowest on record, on the back of continued supply pressures in the region.
Argus assessed spot prices at $300-350/t cfr northeast Asia on 21 April, based mainly on deals concluded within this range. Deals were concluded at $350/t cfr northeast Asia on 17 April, following which deals were transacted at $320-330/t this week.
Another deal was heard concluded on 21 April at $300/t cfr NE Asia, with no further details available.
Ethylene prices have never fallen below $330/t cfr northeast Asia, based on the Argus ethylene price history starting in January 2003.
A steep downturn in ethylene has eroded its value by $540/t or 62pc since 29 January 2020. Spot prices were at $865/t cfr northeast Asia on 29 January and has since plunged on weak market fundamentals.
"Cracker production in northeast Asia is robust, and overall ethylene is amply supplied," said a key trader.
Supplies have been ample in the region on the back of persistent high operating rate at crackers in northeast Asian countries. Most crackers continued to run on an average rate of 90-95pc, supported by positive margins.
The collapse in energy futures late on 20 April added to the weak market sentiment in Asia during Tuesday's trading session. Naphtha prices for physical cargoes were at $192.50/t cfr Japan late on Tuesday, with the naphtha-ethylene spread seen at $132.50/t.
There has also been a steady arrival of deep-sea volumes from Europe and the US, which also added to the overall supply pressures.
Cracker margins have been largely positive despite the decline in ethylene prices since February 2020. Margins have also been supported by the firmness in co-product propylene prices at $630/t cfr northeast Asia.
Propylene prices in northeast Asia have been bolstered by strong demand from the downstream polypropylene (PP) sector. PP fibre grade demand has seen strong support from mask production in China.