Asia ethylene prices expected to stabilize in H1, driven by tighter supply, downstream operations in China and South Korea, heavy turnaround schedule in Japan; some manufacturers have opted to reduce ethylene volumes or not renew production contracts
Allison Oesterle
February 3, 2014 (ICIS Chemical Business (CBNB Abstracts)) – Ethylene prices in Asia are expected to stabilize in 1H 2014 because of tighter supply, according to market players. The projected price stabilization is attributed to downstream operations in China and South Korea and a heavy turnaround schedule in Japan. Two major Korean ethylene producers are likely to become net buyers by 1H 2014 and some manufacturers have decided either to reduce their volume or not to renew their production contracts. In China, several methanol-to-olefins projects are scheduled to become on-stream in 2014 but they are not expected to make any significant impact on ethylene production volume. There are two other factors that could have major effect on ethylene supply in Asia. One is the potential increase in Iran's ethylene export following its signing of an agreement to curb its nuclear programme. The other is Borealis and Abu Dhabi National Oil Company's (ADNOC) Borouge 3 project in Abu Dhabi, United Arab Emirates. A graph shows the changes in ethylene spot prices ($/tonne) on a CFR NE Asia basis from Jan 2012 to Jan 2014. A table shows the schedule of ethylene cracker shutdown in Asia in 2014. These include the shutdown of Asahi Kasei's 500,000 tonnes/y plant in Mizushima, Japan, from 19 Feb 2014 to mid-Apr 2014; Showa Denko's 690,000 tonnes/y ethylene cracker in Oita, Japan, from 13 Mar to 25 Apr 2014; and PTT Global Chemical's cracking facility in Map Tha Phut, Thailand, for around 40 days starting 3 Feb 2014. Original Source: ICIS Chemical Business, http://www.icis.com/, Copyright Reed Business Information Limited 2014.
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