Asian ethylene market begins to recover

Since the second week of November, the Asian ethylene market has begun to improve. The Asian ethylene market has started to fall since the beginning of September. The price has continued to fall from US$1,300/ton at the time to around US$900/ton in early November, and has now rebounded to over US$1,000/ton.

The industry believes that the reason for the rapid decline in ethylene prices in Asia in early September was the influx of polyethylene in the United States, while the products from Europe and the Middle East increased significantly, resulting in oversupply. According to US trade statistics, the US exports of polyethylene to Japan, China and South Korea increased by 30% from January to September this year, an increase of 170,000 tons.

At the same time, due to the failure of a local 700,000 t/y styrene plant in Europe, some European ethylene products entered the Asian market. In particular, the decline of the Rhine water level also affected the demand of the European ethylene market. More than 20,000 tons of ethylene were exported. Asian region.

Ethylene products from the Middle East also far exceeded normal levels. It is reported that between 30,000 and 40,000 tons of ethylene was exported from the Middle East to the Asian market during this period, about twice the normal export volume. The reason for this is the production failures and downtime of the downstream styrene, polyethylene and other ethylene derivatives facilities.

In addition, the US-China trade dispute has also kept people cautious about the trend of downstream finished products, which has affected China's demand for related products. With the decline in demand for acrylonitrile-butadiene-styrene (ABS) resin and styrene-butadiene rubber (SBR) in the downstream terminal electronics, the demand for styrene market has also declined, resulting in supply and demand in the Asian ethylene market. The pace is slowing down.

The ethylene market in Asia has gradually warmed since the second week of November. On the one hand, the inflow of ethylene outside Asia has been basically digested, and the ethylene supply in Asia has gradually recovered to the level before September, and the relationship between supply and demand has become tense. Monitoring data indicates that the ethylene and naphtha spreads in Asia have narrowed to $300 and have now risen above $500.

However, it is difficult to predict how much recovery the Asian ethylene market will have due to the unclear impact of US-China trade friction on economic activity. After the opening of 2019, some of South Korea's major ethylene plants will be shut down for maintenance as planned, and Malaysia will have a new ethylene plant to operate. At the same time, from the end of this year to the beginning of 2019, the United States will also launch several new ethylene plants. Based on the above factors, more polyethylene will enter the Asian market in the future, and it will be difficult to predict how long the recovery of the Asian ethylene market will last.