Ethylene Prices Inches Higher in the USA, Europe Prices Witness Minimum Changes

The prices of Ethylene experienced mixed sentiments across the global market during the final week of March 2023. In the Asian market, the prices remained stable, supported by steady demand and adequate supply. Meanwhile, the speculation of an impending recession across the European economy dampened the demand, which further weighed down the prices of Ethylene in the region. Although, in the USA market, Ethylene prices continued to rise due to improved demand dynamics and limited supplies in the region amid plant shutdown and force majeure by Nova Chemicals.

Replicating its previous week's pricing trend, the prices of Ethylene remained stable in the Asian market. The demand from the Polyethylene and glycol chain industry remained consistent, while the sufficient inventories to cater to demand kept prices unchanged in the regional market. Thus, prices of Ethylene CFR Shanghai were assessed at USD 920/MT during the week ending on 31st March. Furthermore, according to sources, China National Offshore Oil Corp (CNOOC) and Shell Petrochemicals Company Ltd (CSPC), a joint venture recognized by CNOOC and Royal Dutch Shell, have signed a framework agreement worth USD 5.6 billion with China's Huizhou city government to expand their Ethylene project in the Chinese region. Additionally, CSPC aims to increase its Ethylene production capacity in Huizhou by 1.5 million tonnes per annum in addition to its current capacity of 2.2 million tonnes.

On the other hand, Ethylene prices dropped by USD 40/MT in the European market, backed by steady demand dynamics and ample supply. However, feedstock Naphtha increased pursued by the elevated upstream crude oil prices, which resulted in the high production cost of the product in the regional market. Meanwhile, the supply has been supported by cheap offers from the Asian market, which led to the overflow of inventories in the regional market. Hence, as a result, prices of Ethylene FD Hamburg were settled at USD 900/MT during the same time frame. Moreover, demand from the downstream Polyethylene and other value chain has remained stable to weak. Furthermore, a major manufacturer of Ethylene, Total Petrochemical in Gonfreville, France, with a production capacity of 1,146 M Lbs/year, shut down their unit on 26th March 2023 amidst ongoing strike action. As per sources, a restart date remains indefinite.

In contrast, in the USA market, Ethylene prices increased sharply owing to improved demand and restricted inventories in the market. Consumption from the downstream Polyethylene, along with other industries, raised slightly, while the limited material availability forced the manufacturer to increase their price quotation. Furthermore, Nova Chemicals increased its Polyethylene prices due to force majeure after an unplanned outage at its Corunna Ethylene cracker in Sarnia, Ontario, Canada, which has proportionally impacted the prices of Ethylene. Furthermore, ExxonMobil Chemical, in Baytown, Texas, USA, with a production capacity of 2,600M Lbs/year, has restarted its Ethylene unit, which is expected to increase the supply in the region. Consequently, Ethylene prices FOB US Gulf were evaluated at USD 570/MT with a week-on-week increment of USD 95/MT during the week ending on 31st March.

According to ChemAnalyst, global Ethylene prices are anticipated to follow an upward trend in the upcoming months due to growing demand for Ethylene from the downstream Polyethylene and glycol chain industries. At the same time, prolonged plant shutdowns will limit the supply in Q2 of 2023.