The Asia price spread between ethylene and naphtha fell $15.125/mt day on day to $679.875/mt on Monday, the lowest level since June 29, when it was calculated at $675.125/mt, S&P Global Platts data showed Tuesday.
The spread started to fall sharply last week, in line with plunging Asia ethylene prices.
On Monday, the CFR Northeast Asia ethylene price was assessed at $1,100/mt, flat from last Friday but marked a $65/mt week-on-week plunge.
On the other hand, the CFR Japan naphtha price rose $15.125/mt from last Friday to be assessed at $420.125/mt Monday. From a week earlier, the Asian naphtha price rose $18/mt.
Shell in Singapore had announced a force majeure on ethylene supply from its 960,000 mt/year steam cracker in Pulau Bukom last Thursday following an emergency shutdown of the unit on September 27.
Market sources estimate that the shutdown will be more than two weeks, but this could not be confirmed with the company.
The Asian ethylene market only saw minimum impact from the emergency shutdown due to bearish spot demand in the region amid China’s National Day holidays in the first-half of October.
Last week, some spot deals were heard done below $1,100/mt CFR China, compared to previous trade levels in the high-$1,100s/mt CFR China. China’s ethylene inventory is also seen to be sufficient, which resulted in weak ethylene import demand.
According to Chinese customs data, China’s ethylene imports amounted to 133,326 mt in August, up 7.5% from a month earlier. Looking forward, market sources said the spread would likely rebound as spot ethylene demand is expected to return in the second-half of October, as Chinese end-users would start returning to the market next week after the holidays.
