Ethylene and propylene spot prices have collapsed to a low not seen since December 2009 and January 2010 respectively, with both products falling on the back of the recent upstream slump creating oversupply.
The overhang is not expected to ease with Versalis currently carrying out maintenance at its 490,000 mt/year steam cracker in Porto Marghera, ahead of a restart mid-February, trade union officials said Monday.
Versalis’ January 8 deal with Shell to supply the major with propylene and ethylene manufactured by the Italian company’s Porto Marghera cracker will run for 12-15 months, union sources said.
Neither Shell nor Italian oil and gas major Eni, which owns Versalis, were immediately available for comment on the matter Monday.
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In addition, Shell’s 260,000/mt year ethylene and 240,000/mt year propylene steam cracker in Wesseling, Germany, is in the process of restart following maintenance that began in the middle of October, a company spokeswoman said Friday.
Ethylene and propylene were assessed at Eur705/mt and Eur758/mt FD NWE, Monday, respectively.
Naphtha prices were assessed at $380.25/mt CIF NWE on Monday, after touching a near six-year low of $377.50/mt CIF NWE Wednesday.
The drop in spot prices followed the plunge in ethylene and propylene contract pries for January. Ethylene and propylene contract prices for January fully settled December 23 at Eur835/mt FD NWE and Eur880/mt FD NWE, down Eur120/mt and Eur130/mt on the month respectively, a low not seen for both since January 2010.
With both ethylene and propylene markets described as long by some sources, a pickup in downstream demand has not yet surfaced to change this following the vacation period.
Low density polyethylene and polypropylene demand remained weak as some participants were said to be absent from the market, last week, following the holiday period, sources said.
In regards to other crackers, it was unclear if ExxonMobil’s cracker in Notre Dame de Gravenchon, France, had restarted following its turnaround. It also entered maintenance in October. Its ethylene and propylene capacities are 425,000/mt year and 300,000/mt year, respectively.
It was also unclear if Total’s NC3 naphtha cracker in Antwerp, Belgium, had restarted following a “semi-planned” shutdown in October. NC3 has a stand-alone capacity of 580,000/mt year.
Neither Total nor ExxonMobil were immediately available for comment.
– Platts.com
