Antwerp (Belgium): The prices of Ethylene showed a mixed trend across the globe during the week ending 17th February 2023. In Asia and the USA, market prices were increased due to improved demand from the downstream industry and the cracker shutdown in China. Meanwhile, in the European market, prices have been on the lower side due to limited queries from the downstream industry and low energy prices in the region. Furthermore, INEOS has announced a green field capacity in Antwerp, Belgium.

Last week, Ethylene prices increased in the Chinese market. The price rise was driven by limited product availability because of curtailed production rates at steam crackers in the region. On the other hand, demand from downstream packaging and other competitive industries has increased due to improved buying sentiments in the domestic market, post the Lunar New year Holidays. In addition, the major manufacturer of Ethylene, Zhejiang Petroleum and Chemical (ZPC) in Zhoushan, Zhejiang, China, has a capacity of 1.4 million MT/year has taken off-stream its No. 2 Ethylene cracker in early February 2023 due to maintenance. Further, details of the duration of the shutdown could not be ascertained. In conclusion, prices of Ethylene were assessed at USD 875/MT with a week-on-week increment of USD 15/MT.

Furthermore, PetroChina Guangdong Petrochemical Refining and Chemical Integration Project, located in Jiyeang, Guangdong Province, has completed trials run at 1.2 million tonnes/year Ethylene facility at its newly launched refinery complex. The successful trial production of the Ethylene plant ensures the stable output of Naphtha and LPG products in the upstream refinery unit. It provides stable feedstock for the downstream Polyethylene plant to ensure the overall stable refining and chemical integration operation.

Similarly, Ethylene prices have risen marginally in the USA market as demand from the downstream packaging industry was stable while the supply remained sufficient in the domestic market. Although market participants reported, supply would drop towards the end of the month amid tornado action on 24th February, which may temporarily affect the operation at some Ethylene plants in Texas. Thus, in conclusion, Ethylene FOB US Gulf prices were settled at USD 451/MT with a week-on-week increment of USD 22/MT during the same time frame.

However, in the European market, Ethylene prices have gained downward momentum due to weak demand from the downstream Polyethylene and other competitive industries, while the material availability has remained sufficient in the region. The Mintec Global Packaging Category Index increased by 3% month-on-month but was down by 18% year to year, to $1,493 in January 2023. Regarding domestic production, operating rates remained under check amid weak consumption from the downstream industry. In addition, energy (natural gas) prices have tumbled to their lowest level due to plenty of availability in the European region. Meanwhile, a decline in freight rates resulted in the cheap Asian imported material available in the region. Hence, prices of Ethylene FD Hamburg were offered at USD 945/MT on 17th February 2023.

Furthermore, British Chemical company INEOS has recently announced the construction of Europe's largest eco-responsible plant for the production of Ethylene in Antwerp, Belgium, with an investment of 3.5 billion Euros. The site will be equipped to run on Hydrogen and will be capable of assisting a carbon capture unit. It is an ambitious project that will contribute to the growth of the global Ethylene market. According to INEOS, the new plant Ethylene will schedule to open in 2026.

According to ChemAnalyst, "Global Ethylene prices are expected to increase in the coming weeks due to further expectation of rising demand from the end-user market. Meanwhile, cost pressure from the feedstock Naphtha and upstream Crude Oil prices may positively impact the production cost of Ethylene across the global market."