Ethylene prices have witnessed an oscillating trend across the globe during the fourth week of March 2023. In Europe and the Asian market, Ethylene prices showed a downtrend backed by the gloomy demand from the downstream industries, ample supply, and cheaper offers from the exporting countries. However, in the USA market, Ethylene prices increased owing to high feedstock prices. Moreover, high inflation and rising interest rates by the US Federal Reserve have further obstructed the market growth of Ethylene.

As per the data, Ethylene prices decreased in the Chinese market owing to the weak cost pressure from feedstock Naphtha. The decline in consumption from the downstream Polyethylene, along with the Glycol value chain, has further weighed down the prices of Ethylene. In addition, the global economic slowdown and the cheaper imports from other countries have shifted the downstream purchases from China, debilitating the supply-demand fundamentals. Thus, as a result of subdued downstream demand, the manufacturers were forced to revise their negative price quotations. Hence, prices of Ethylene were assessed at USD 920/MT with a week-on-week decrement of 1.1% during the week ending March 24, 2023. Furthermore, Huajin Aramco Petrochemical Company (HAPCO), a joint venture between Aramco, NORINCO Group, and Panjin Xincheng Industrial Group, is building a refinery and petrochemical complex at Panjin in Liaoning province, which is expected to start full operations in 2026. The new complex will combine a 300,000 bbl/day refinery and a petrochemical plant with an annual production capacity of 1.65m tonnes of Ethylene.

Furthermore, one of the major manufacturers of Ethylene, Reliance Industries Limited in Dahej, India, is likely to shut its Ethylene unit with a production capacity of 1,014 M Lbs/yr. for a maintenance turnaround on April 6, 2023. Expectations are to resume operations on May 5, 2023.

On the other hand, Ethylene prices have been observed on the lower end in the German market due to the weak spot demand and firm inventories. Operating rates remained weak in the domestic market owing to sluggish consumption from the downstream industries. Meanwhile, feedstock Naphtha prices raised, but it had limited bearing over the Ethylene prices. Furthermore, imports from South Korea and Japan have turned cheaper as prices decreased in the Asian market. At the same time, demand for Ethylene from the downstream Polyethylene and other competitive industry have remained bearish. Market participants reported limited queries from the end-user. Thus, Ethylene prices in FD Hamburg were settled at USD 940/MT during the same time frame.

Although Ethylene prices have gained upward momentum in the US market due to the high-cost pressure from the raw material Naphtha prices, in addition, demand from the downstream Polyethylene and other industries has remained stable in the domestic market. Furthermore, a major manufacturer of Chevron Phillips Chemical in Sweeny, Texas, having a capacity of 2,250 M Lbs/year, has shut down its Ethylene unit for a maintenance turnaround. The unit is expected to restart in late April 2023. Thus, in conclusion, prices of Ethylene FOB USGC were offered at USD 475/MT during the previous week.

As per the ChemAnlayst, global Ethylene prices will likely increase due to further anticipations of growing demand from the downstream industry. Meanwhile, feedstock Naphtha prices rise, which may positively affect the production cost of Ethylene in the near time.