Ethylene on downturn globally; Europe gains premium over Asia
Along with the recent declines, the European spot ethylene market appears to have gained premium of around $170-175/ton over the Asian market on a weekly average basis, according to ChemOrbis Price Wizard. This is atypical as European spot ethylene prices mostly traded below Asia in the last four years, as the data from ChemOrbis Price Wizard reveals. The premium of European spot market over the Asian prices has gradually increased since mid-May, reaching the highest levels seen since mid-September 2015 recently, according to the weekly averages.
The widening gap has resulted from the steeper declines in the Asian ethylene market compared to the European market, where delayed restarts at some regional crackers lent a support to the spot prices.
In Asia, spot prices started to weaken as of early May given increasing supply levels combined with unsupportive demand from the downstream PE market in the midst of volatile energy complex. Spot ethylene prices on CFR FEA basis have plunged by around $250/ton since mid-May, to be currently standing at the lowest levels since late February 2016 based on the weekly average levels on ChemOrbis Price Wizard.
In Europe, meanwhile, spot ethylene prices have been tracking a softening trend as of early May on a weekly average basis, after reaching the highest levels seen since late June 2015 in mid-April. Since the beginning of May, spot prices declined by around €95/ton on FD NWE basis.
In addition, in the US, spot prices are currently standing at the lowest levels since late December 2016 with prices gradually declining since mid-May. Compared to the levels recorded at that time, current spot prices are indicating a visible decline of $132/ton on FD USG basis.
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