Spot ethylene markets move in opposite directions in Asia, US.
Petrotahlil :Spot ethylene markets move in opposite directions in Asia, US
Spot ethylene prices have been following different paths recently. Prices in Asia are losing ground on fading demand prior to the Golden Week while they remain on an uptrend in the US with support from several short-lived outages due to the tropical depression Imelda.
Asian C2 market hits 2-month low
Spot ethylene prices in Asia took a break from their month-long softening over the past week and reversed direction in response to supply woes after Saudi Aramco’s oil processing plants were targeted for drone attacks by mid-September. Although crude oil prices reacted immediately to the attack, its impact somewhat diminished later last week as several Saudi producers announced improving availability.
After last week’s busy agenda, the market has weakened again in recent days due to waning demand ahead of the Golden Week, which takes place in early October.
ChemOrbis data show that the weekly average of CFR China based spot ethylene prices is currently standing at its lowest levels since late July following the recent losses.
US C2 market gains %30 in past two weeks
Contrary to the Asian C2 market, the firming trend in the US market has gained speed in the past two weeks, gaining %29.5 on average according to ChemOrbis data.
Although crude oil futures’ initial reaction to the Aramco attacks have played a role in these recent gains, the tropical depression Imelda made a bigger contribution as it resulted in short-lived outages at LyondellBasell, ExxonMobil and Ineos’ crackers in the Gulf Region.
ChemOrbis data also suggest that the sharp increases in the past two weeks have carried the US market to its highest levels not seen since January 2018.
Asian C2 market’s premium over US narrows
Along with the recent declines, the Asian spot ethylene market has lost its premium of almost $140/ton over the US market over the past two weeks, with the gap between the two markets narrowing to a more than 4-year low recently.
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