For the Quarter Ending September 2024
North America
The third quarter of 2024 has been a period of significant price escalation for Ethylene in North America, with the USA experiencing the most notable price fluctuations. Various factors have contributed to the surge in market prices thus creating optimistic market sentiments.
Tight supply conditions, driven by low production rates and plant maintenance shutdowns, have limited Ethylene availability, leading to a bullish market sentiment. Additionally, strong demand from the downstream Polyethylene sector, particularly in the packaging industry, has further bolstered prices. The quarter-on-quarter price increase of 44% underscores the growing market dynamics.
Comparing the first and second half of the quarter, prices surged by 20%, indicating a rapid acceleration in the pricing environment. Overall, the price trend for Ethylene in the USA has been overwhelmingly positive, with an impressive 51% increase from the same quarter last year. The quarter-ending price of USD 735/MT for Ethylene Spot FOB US Gulf in the USA reflects the robust and continuously rising pricing landscape in the region.
APAC
Ethylene pricing in the APAC region during Q3 2024 has seen a consistent decrease, influenced by various factors. The market has been impacted by weak demand from downstream industries, particularly in the Polyethylene sector, leading to oversupply and subsequent price drops. Additionally, reduced operating rates in manufacturing firms and supply constraints due to plant shutdowns have further contributed to the downward pressure on prices. Japan, in particular, has experienced significant price changes, with limited availability of Ethylene and technical issues at major production facilities leading to tighter supplies and higher prices. Overall, the quarter has seen a decline of 6% compared to the same quarter last year, reflecting the ongoing bearish trend. Moreover, the quarter-on-quarter change of -2% indicates a consistent downward trajectory in pricing. The second half of the quarter showed a further decrease of 1%, culminating in the latest quarter-ending price of USD 833/MT of Ethylene FOB Tokyo in Japan. This continuous decrease highlights the negative pricing environment prevailing in the market.
Europe
Throughout Q3 2024, Ethylene prices in Europe experienced a significant increase, with Germany being the most affected market. This surge in prices can be attributed to a combination of factors such as tight supply situations, increased feedstock Naphtha prices, and global oil price fluctuations. Demand from downstream industries, particularly Polyethylene and Ethylene oxide, remained subdued, contributing to the upward pressure on prices. The quarter saw a notable 27% increase compared to the same period last year, with a 10% increase from the previous quarter in 2024. Price changes within the quarter also showed a 17% difference between the first and second half. Germany, in particular, witnessed substantial price fluctuations, with Ethylene FD Hamburg reaching USD 1011/MT by the end of the quarter. Creating optimistic market sentiments throughout Q3 2024. This continuous upward trend in prices indicates a positive pricing environment, driven by supply constraints, rising production costs, and limited imports, ultimately leading to a bullish market sentiment in the region.
MEA
In Q3 2024, the MEA region witnessed a decline pricing environment for Ethylene. This quarter was characterized by consistent pricing trends, influenced by various factors. The market prices were primarily impacted by subdued demand from downstream industries, particularly in the plastics and packaging sector, leading to a surplus in supply. Additionally, fluctuations in feedstock Naphtha prices and global economic conditions contributed to the stability in Ethylene prices. Focusing on Saudi Arabia, which experienced the most significant price changes, the market reflected an overall negative trend compared to the same quarter last year, with a decrease of 9%. Moreover, there was a 0.48% decrease from the previous quarter in 2024. The comparison between the first and second half of the quarter showed no significant price changes, maintaining a stable trajectory. The quarter-ending price for Ethylene FOB Al Jubail in Saudi Arabia stood at USD 825/MT, indicating a consistent and stable pricing environment in the region.
For the Quarter Ending June 2024
North- America
Ethylene prices have significantly increased in the US market throughout the second quarter of 2024 on the back of improved demand dynamics and restricted inventories. The feedstock Ethane prices increased throughout the quarter which escalated the production cost of Ethylene within the domestic market, leading the bullish market sentiments about Ethylene among the end-users.
However, energy prices have showcased volatility during the Q2 of 2024. In addition, the domestic demand for Ethylene from the downstream Polyethylene industry has been strong from both processors and resellers amid the summer peak season which lifted the prices of Ethylene in the domestic market. Meanwhile, export demand from Latin America mainly Brazil has also been observed on the higher end as Latin American buyers, facing high freight costs and delays from Asia amid port congestion, turned to the US for quicker and more competitive supplies.
Furthermore, the operating rates remained low and as a result, the material availability was inadequate to meet the downstream demand. On the other hand, the indefinite closure of the Port of Baltimore after a bridge collapse has impacted the supply of various commodities including Ethylene. Thus, prices of Ethylene FOB US Gulf were settled at USD 510/MT with a month-on-month increment of 14.1% during June 2024.
Asia- Pacific
Ethylene prices have witnessed a downward trend across the Japanese market during the second quarter of 2024 owing to weak demand from derivative sectors coupled with sufficient supply in the domestic market. The feedstock Naphtha prices have persistently declined amid adequate inventories and limited demand which resulted in the low production cost of Ethylene in the domestic market, contributing to a downward shift in the price realization of Ethylene in the domestic market. On the demand front, the inquiries from the downstream Polyethylene industry were average as consumption from the end-user plastic and packaging sector has declined which weighed down the prices of Ethylene in the domestic market. In addition, downstream production margins remained weak, with buyers citing poor profitability on key derivatives such as Polyethylene. In the meantime, demand from the overseas market has also tepid amid weak buying trends among the end-users during the week. However, as per the market sources, Japan’s exports surged 13.5% in May, faster than expected growth helped by a weak yen.
Additionally, the operating rates have been steady to balance out underperforming demand. The material availability was observed on the higher end, keeping the prices downtrend in the domestic market. Therefore, prices of Ethylene FOB Tokyo were settled at USD 848/MT during June 2024. Mitsui Chemicals, Ichihara has shut down the Ethylene plant amid maintenance turnarounds, but it had a minimal impact on the supply of Ethylene.
Europe
The second quarter of 2024 has been notably challenging for the Ethylene market in Germany, characterized by a downward trend in Ethylene prices. Despite the challenging landscape, signs of cautious optimism are emerging amid the recent rally in freight rates and container shortage. The feedstock Naphtha prices declined throughout the quarter resulting in the low production cost of Ethylene which weighed down the prices of Ethylene in the domestic market. However, upstream crude oil prices have showcased a fluctuation during the Q2 of 2024.
Furthermore, underlying weakness in the domestic Ethylene market continued to call for limited demand from the downstream Polyethylene industry. Converters still preferred to buy on a need basis, while buying interest further declined amid macroeconomic headwinds in the domestic market. Overall, subdued downstream demand contributed to a downward shift in the price realization of Ethylene within the domestic market.
On the other hand, the supply of Ethylene was sufficient despite the low domestic operating rates, keeping the prices downward. At the same time, persistent delays in shipments from Asia continued to affect the market, causing port congestion and delayed arrivals at the warehouse. Also, freight charges have remained on the higher end amid the Red Sea crisis. However, it had a minimal impact on the prices of Ethylene as buyers were reluctant to purchase the material as demand remained flat at low levels while inventories remained healthy. Additionally, market conditions were expected to remain fairly stable up to August, with more uncertainty after summer. Thus, prices of Ethylene FD Hamburg were settled at USD 795/MT with a monthly decrement of 3.0% during June.
Middle- East
Ethylene prices have witnessed a downward trend across the Saudi Arabian market during the second quarter of 2024 in the wake of thin derivative demand and excessive supply. The cost supported by feedstock Naphtha was limited to Ethylene as its prices settled on the lower end, causing the prices to follow a downtrend in the domestic market. On the other hand, the domestic Ethylene market experienced a subdued trading momentum, as reflected in the weakening purchase appetite for materials. The adverse impact on market sentiment arises from a combination of bearish factors comprising weak demand from the downstream Polyethylene industry amid holiday lulls. Additionally, consumers were seen preferring to make need-based purchases owing to a fall in orders from end-user industries, which weighed down the prices of Ethylene in the domestic market. Meanwhile, demand from the overseas markets has also flat with expectations that it may not recover soon amid external challenges. Moreover, the supply of Ethylene was sufficient amid a decline in new orders to meet the overall downstream demand which further deteriorated the prices of Ethylene in the domestic market. Thus, during June prices of Ethylene FOB Al Jubail were settled at USD 863/MT with a decrement of 2.7% on a monthly basis.
For the Quarter Ending March 2024
North America
Ethylene prices have witnessed a mixed trend in the US market during the first quarter of 2024. During the initial Q1 of 2024, Ethylene prices have inched lower in the domestic market. The feedstock Ethane prices have declined which resulted in the low production cost of Ethylene in the domestic market. These lead to the bearish market sentiments of Ethylene among the manufacturers.
On the input energy front, Natural gas prices have been low this winter, helped by healthy production and unusually warm weather which further eased the overall production cost of Ethylene in the domestic market. In addition, demand for Ethylene from the downstream Polyethylene and Ethylene oxide industry was sluggish from both the domestic and international market which weighed down the prices of Ethylene in the domestic market.
However, towards the end of Q1 2024, Ethylene prices have gained an upward momentum in the domestic market. The reduced operating rates in the previous month amidst the holiday season have led to limited availability of finished stocks. As a result, manufacturers have raised their offers. Additionally, as per the market sources, the downstream manufacturing firms have been returning from the winter holiday seasons and were focused on replenishment the raw materials to supplement the downstream production, reinforcing the market fundamentals of Ethylene among the manufacturers. Moreover, on the demand front inquiries from the downstream Polyethylene industry have improved as consumption from the plastic and packaging sector has steadily increased which further pushed up the prices of Ethylene in the domestic market. As a result, prices of Ethylene FOB US Gulf were settled at USD 428/MT during March 2024.
Asia- Pacific
Throughout the first quarter of 2024, Ethylene prices have persistently increased in the Japanese market on the back of high upstream costs and tight supply within the domestic market. The cost support from feedstock Naphtha was sufficient for Ethylene as its prices settled on the higher end in the domestic market, leading to the bullish market sentiments of Ethylene among the manufacturers. On the input energy front, crude oil prices have remained above $80 per barrel for much of February, indicating a tightening in the physical market due to ongoing OPEC+ production cuts and the prolonged rerouting of cargoes away from the Red Sea and the Suez Canal. Furthermore, during the holiday, the production situation of downstream factories varies, with some mainly digesting inventory, leading to an increase in the demand for Ethylene. In addition, amidst the disruptions across the Red Sea, the freight rates have also remained on the higher end. On the other hand, manufacturing firms have been operating at low rates in response to an overall decline in downstream demand, leading the insufficient material availability in the domestic market. As a result, prices of Ethylene FOB Tokyo were settled at USD 935/MT during March 2024.
Europe
Ethylene prices have been on a firm footing across the German market during the first quarter of 2024 on the back of high upstream costs and logistics snarls that curtailed import material flow. The cost support from feedstock Naphtha prices was sufficient on Ethylene as its prices settled on the higher end in the domestic market. On the input energy front, crude oil prices have been strengthening over the past few weeks following a string of drone attacks by Ukraine on Russian refineries, sparking concern about fuel supply security. The rise in crude oil prices has further raised the overall production cost of Ethylene in the domestic market. Furthermore, reduced domestic production in the previous month in response to a decline in downstream demand, leading to the limited availability of finished stock of Ethylene in the domestic market. Meanwhile, import prices have reached their highest levels as longer transit times and high shipping costs stemming from the Red Sea attack caused a series of notable hikes. Looking at the demand side, the inquiries from the downstream Polyethylene industry however remained average within the domestic market as consumption from the packaging and plastic industry has slowed down amid macroeconomic headwinds. As a ripple effect, prices of Ethylene FD Hamburg were settled at USD 938/MT during March 2024.
Middle- East
Ethylene prices have persistently increased in the Saudi Arabian market throughout the first quarter of 2024. The cost side was one of the major drivers of the uptrend as feedstock Naphtha prices have continued to rise, leading to the bullish market sentiments of Ethylene among the manufacturers. On the upstream front, global crude oil prices have remained above USD 80 per barrel, indicating a tightening in the physical market amid ongoing OPEC+ production cuts and the prolonged rerouting of cargoes away from the Red Sea and Suez Canal. The strong crude oil prices have further pressured the feedstock Naphtha prices to remain firm within the domestic market. Despite this, OPEC+ is not planning any policy changes in the upcoming joint Ministerial Monitoring Committee meeting. Meanwhile, geopolitical tensions in the Middle East and Russia are raising concerns about tighter supply. Market players are closely monitoring these developments, alongside global economic struggles against recession and the Federal Reserve's potential rate cuts this summer. Furthermore, demand for Ethylene from the downstream Polyethylene industry was stable as consumption from the plastic and packaging sector has been steady in the domestic market.
For the Quarter Ending December 2023
North- America-
Ethylene prices have experienced a mixed sentiment across the US market during the fourth quarter of 2023. During the initial of Q4 2023, Ethylene prices increased significantly due to limited material availability in the domestic market. The cost support from feedstock Ethane was sufficient as its prices settled on the higher side in the domestic market. In addition, demand for Ethylene from the downstream Ethylene oxide and Polyethylene industry has improved, which led to the bullish market sentiments of Ethylene among manufacturers.
However, during November and December, Ethylene prices have inched lower in the domestic market. The feedstock Ethane prices have decreased amid weak demand from other industries which in turn led to the low production cost of Ethylene. In addition, demand for Ethylene from the downstream Polyethylene and Ethylene oxide industry has remained subdued amid the off-seasonal dullness along with macro-economic headwinds including high inflationary pressure and rising interest rates, leading the bearish market sentiments of Ethylene among the manufacturers. In addition, spot market transactions were also average as the enthusiasm of terminal firms to enter the market was not strong.
In the meantime, demand from international markets including Asia and European markets has subdued in recent weeks as macroeconomic challenges continue to keep consumer spending at bay. US Ethylene producers faced difficulties in raising export prices as buyers found it difficult to stomach. On the supply side, the material availability was plentiful to cater to overall downstream demand which further weighed down the prices of Ethylene. Therefore, prices of Ethylene FOB US Gulf were settled at USD 421/MT during December 2023.
Asia- Pacific-
Ethylene prices displayed varied sentiments in the Asian market throughout the final quarter of 2023. In the early stages of Q4, Ethylene prices saw an uptick in the Japanese market, driven by cost pressures from elevated feedstock Naphtha prices in the domestic market. This resulted in a bullish outlook among Ethylene manufacturers. Additionally, demand from the domestic Polyethylene industry remained moderate during this period.
However, towards the end of Q4, Ethylene prices experienced a decline in the Japanese domestic market. The demand from both the Polyethylene and Ethylene oxide industries remained sluggish due to macro-economic challenges and low seasonality. Spot market transactions were also average. The economic downturn in China, the world's second-largest economy, had a ripple effect on countries dependent on trade with Beijing for growth, including the Japanese Ethylene industry. This impact was not geopolitical but rather a consequence of the economic slowdown. Weak global demand subdued domestic activity, and concerns in China's property sector contributed to the downturn in the Japanese Ethylene industry. According to the Ministry of Finance, Japanese exports dropped 0.2% YoY to JPY 8,819.59 billion, marking the first decline in three months, mainly influenced by weak demand from China.
Furthermore, the decrease in feedstock Naphtha prices led to a reduction in the production cost of Ethylene in the Japanese domestic market. Additionally, Japan's manufacturing activity declined in November, reflecting the fragility of the economy amid weak demand and inflation. High material availability on the supply side added pressure on manufacturers to clear inventories at lower prices. Consequently, Ethylene prices FOB Tokyo was settled at USD 853/MT in December 2023.
Europe-
Ethylene prices have showcased mixed bags in the European market during the fourth quarter of 2023. During October 2023, Ethylene prices significantly increased in the German market due to inadequate material availability in the domestic market. The demand for Ethylene from the downstream Polyethylene and Ethylene oxide industry has remained active which supported the prices to follow an upward trend in the domestic market. Meanwhile, imports from the Asian market have turned costly as freight charges have increased which in turn led to high imported prices of Ethylene in the domestic market.
However, during November and December 2023, Ethylene prices have gained a downward trend in the domestic market. The demand for Ethylene from the downstream Polyethylene and Ethylene oxide industry has remained lukewarm due to macroeconomic headwinds including persistent inflationary pressure and high interest rates coupled with low seasonality which weighed down the prices of Ethylene across the domestic market. Furthermore, BASF mapped out further cost cuts and scaled back investment spending; earnings and sales were at the lower end of its target ranges due to an uncertain global outlook.
In addition, cost pressure from feedstock Naphtha was limited on the Ethylene as its prices settled on the lower end in the given time frame. Also, the German manufacturing purchasing manager index remained in the contraction zone (i.e., below 50) indicating a deterioration in industrial and production activity. Furthermore, amid the destocking season, manufacturers have cleared out their inventories at low prices. As a result, prices of Ethylene FD Hamburg were settled at USD 730/MT during December 2023.
Middle East-
Throughout the final quarter of 2023, the Saudi Arabian Ethylene market experienced fluctuations in prices. In the early part of Q4, domestic Ethylene prices saw an upward trajectory, primarily influenced by increased Naphtha prices, a key feedstock, and robust crude oil prices, elevating the production cost of Ethylene domestically. The heightened demand from both domestic and international markets, particularly from the Polyethylene and Ethylene oxide industries, prompted manufacturers to raise their pricing.
However, towards the end of Q4, there was an unexpected decline in Ethylene prices within the domestic market. This was attributed to subdued demand in the midst of off-season sluggishness and a tepid global economy. Ethylene demand from both domestic and international markets was lackluster, leading to weak inquiries from the downstream Polyethylene industry. Slow consumption in the end-user sector contributed to bearish market sentiments among Ethylene manufacturers.
Additionally, a decrease in feedstock Naphtha prices, coupled with low crude oil prices, resulted in a reduction in the production cost of Ethylene in the domestic market. Despite turmoil in the Red Sea, upstream Crude oil prices dropped due to weak demand and ample storage, further easing the overall manufacturing cost of Ethylene domestically.
Looking ahead, the prevailing bearish sentiment is expected to persist into the new year due to tepid demand. Buyers are exercising caution, awaiting more clarity amid the ongoing war, and growing economic challenges. Consequently, Ethylene prices FOB Al Jubail was settled at USD 867/MT in December 2023.
For the Quarter Ending September 2023
North America
During the third quarter of 2023, Ethylene prices have demonstrated a mixed trend in the US market. During July 2023, Ethylene prices have settled on the lower side. The macroeconomic uncertainties, such as persistent inflationary pressure and high-interest rates by the central bank, have eroded the purchasing power of consumers. The demand for Ethylene from the downstream Polyethylene industry has remained tepid due to sluggish buying sentiments among the end-users, which weighed down the prices of Ethylene in the domestic market. The oversupply of feedstock Ethane has limited the positive development of Ethylene. In addition, Natural gas prices have also been observed on the negative side, which further eased the overall production cost of Ethylene in the domestic market. On the other side, the US Manufacturing Purchasing Index remained below 50 in July, indicating a contraction in new orders. However, after the bearish run, Ethylene prices have gained an upward momentum due to high-cost pressure from feedstock Ethane prices. Furthermore, the supply chain has been impacted by the prolonged drought in the Panama Canal and Hurricane Hilary, leading to a supply shortage in the domestic market. However, demand from the downstream Polyethylene industry has been moderate, and downstream inquiries were mainly based on a need-on-demand basis. Overall, high feedstock prices have raised the prices of Ethylene in the domestic market. Therefore, prices of Ethylene FOB US Gulf were settled at USD 428/MT with a monthly increment of 12.0% during September 2023.
Asia-Pacific
Ethylene prices have shown fluctuations in the Asian market during the third quarter of 2023. During the initial of Q3, Ethylene prices have inched lower in the South Korean market due to subdued demand from the downstream Polyethylene industry as offtake from the packaging and plastic industry has slowed down amidst persistent inflationary pressure and high interest, which weakened the consumer sentiments. The level of inventories was sufficient as new orders declined, which weighed down the prices of Ethylene in the domestic market. Furthermore, a major producer of Ethylene, Lotte Chemical Corp, has reported an operating loss for a fifth straight quarter due to sluggish petrochemical demand. Second-quarter sales declined 5.9% year on year to about 5 trillion won. Net loss stood at 14.03 billion won. The decline in sales was attributed to lower petrochemical prices triggered by weak downstream demand. However, towards the middle and final of Q3, Ethylene prices have increased substantially in the domestic market. The feedstock Naphtha prices have continued to rise, resulting in the high production cost of Ethylene in the domestic market. On the other side, upstream crude oil prices have remained above $80/barrel with support from falling oil inventories and supply cuts from the OPEC+ group of oil producers. Additionally, Saudi Arabia is expected to extend a voluntary oil output cut of 1 million barrels a day into October, which will further raise the prices of global crude oil. In addition, demand from the downstream Polyethylene industry has improved marginally in the domestic market. The downstream procurements were mainly based on immediate requirements. As a result, prices of Ethylene FOB Busan were settled at USD 826/MT during September 2023.
Europe
Ethylene prices have showcased mixed sentiments across the European market throughout the third quarter of 2023. During July 2023, Ethylene prices have drastically declined in the Italian market, supported by weak spot demand and sufficient inventories in the domestic market. The inquiries from the downstream Polyethylene industries have remained subdued amid the summer holidays. In addition, downstream demand destruction caused by ongoing economic woes has prompted buyers to renegotiate contractual offtakes for the remainder of the year. Some buyers are even considering procuring from the spot market instead to take advantage of cheaper prices on offer. The disparity between contract and spot prices has been a major factor for chemical producers in Europe, and continual weak demand and international competition have weighed down the operating rates of manufacturing firms. Despite the low operating rates, material availability was adequate to meet the overall downstream demand and weighed down the prices of Ethylene. Furthermore, Dow Chemical reported that the Packaging & Specialty Plastics segment's net sales in the second quarter of 2023 were $5.9 billion, down 28% compared with the previous year due to lower Ethylene and Polyethylene prices across all regions driven by lower global energy and feedstock costs. Despite weak downstream demand, Ethylene prices have gained an upward trend during August and September 2023. The cost support from feedstock Naphtha was sufficient as its prices settled on the higher end in the given time frame, supporting the prices to follow an uptrend. On the other side, the upstream crude oil prices have increased with the tighter supply due to Saudi Arabia's oil output restriction and news that OPEC+ production dropped by more than 1 million barrels per day in July, further impacting Ethylene's overall production cost in the domestic market. As a result, prices of Ethylene FD Genoa were settled at USD 781/MT with a month-on-month increment of USD 129/MT during September 2023.
Middle-East
Prices of Ethylene have witnessed a mixed trend in the Saudi Arabian market during the third quarter of 2023. During the initial of Q3, Ethylene prices have significantly declined in the domestic market. The oversupply of feedstock Naphtha has limited the positive development of Ethylene. The demand from the downstream Polyethylene industry has decreased as consumption from the plastic and packaging sector has slowdown which weighed down the prices of Ethylene in the domestic market. On the other hand, a major producer of Ethylene, SABIC, has reported its earnings for the second quarter of 2023. The company's revenue for the second quarter reached SAR 37.17 billion ($ 9.91 billion). Net income during the second quarter totaled SAR 1.18 billion [$ 0.31 billion], an increase of 79% versus net income of SAR 0.66 billion [$ 0.18 billion] in the prior quarter despite a challenging economic environment with increased supply in main products. In addition, the EBITDA margin has improved from 13% achieved in the last quarter to 14% in the second quarter of 2023. However, during the mid and final of Q3 of 2023, Ethylene prices have gained upward momentum due to high-cost pressure from feedstock Naphtha. On the upstream front, crude oil prices have settled at a 10-month high after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year, worrying investors about potential shortages during peak winter demand. In addition, demand for Ethylene from the downstream Polyethylene industry has improved, albeit at a smaller pace in the domestic market. Therefore, Ethylene FOB Al Jubail prices were settled at USD 829/MT with a month-on-month increment of 10.8% during September 2023.
For the Quarter Ending June 2023
North America
Ethylene prices have shown a mixed trend in the USA market during the second quarter of 2023. During April, Ethylene prices have significantly increased, supported by the moderate demand and inadequate inventories amidst plant shutdowns. The inquiries from the downstream Polyethylene and Glycol value chain industry have remained stable in the domestic market, while the availability of finished stocks of Ethylene has remained inadequate, which promoted the manufacturers to keep their prices in an upward trend throughout the month. In addition, Motiva Enterprises in Port Arthur, Texas, having a production capacity of 1,660 M Lbs/year, shut down its Ethylene unit on 1st April 2023 due to unplanned maintenance. On the other side, Shintech in Louisiana remains shut down at its 1,100 M Lbs/yr. Due to compressor complications, the ethylene unit in Plaquemine, LA, resulted in limited material availability in the domestic market. However, after the bullish run, Ethylene prices showcased a bearish rally in May and June amidst tepid demand and sufficient inventories in the domestic market. The oversupplies of feedstock Ethane have limited the positive development of Ethylene. In addition, the demand from the downstream polyethylene industries has remained weak, and the market transactions were mainly on a need-on-demand basis. Furthermore, macroeconomic factors such as restrictive interest rates and tightening credit from the regional banking turmoil have a cumulative impact on the downshift observed in the price realization of Ethylene in the domestic market.
Asia-Pacific
Ethylene prices have continued to decline in Japan (a major exporter of Ethylene) throughout the second quarter of 2023, supported by the weak feedstock and limited demand. The cost pressure from the feedstock Naphtha was limited as Naphtha prices reached a 2-year low, reported by the market participants. The high inflationary pressure, volatile energy prices, and slow economic recovery of China (a major importer of Ethylene) have further deteriorated the market growth of Ethylene in the Japanese market. On the demand front, inquiries from the downstream Polyethylene industry have been slower- than- expected in the domestic and international markets amidst weak buying trends among the end-users. In addition, the major Ethylene Idemitsu Kosan Company Limited manufacturer in Ichihara, Japan Chiba, having a production capacity of 413,000MT/year, shut down its Ethylene unit on 27th March 2023 for a maintenance turnaround. At the same time, Asahi Kasei, Mizushima, Japan, having a production capacity of 570,000 MT/Year, shut down their Ethylene cracker at the end of May 2023 amid maintenance shutdowns. Further, Mitsui Chemical, Chiba in Japan, having a production capacity of 612,000 MT/Year, has shut down its Ethylene cracker on 17th June 2023 amid unplanned shutdowns. Despite the plant shutdown, the availability of Ethylene remained sufficient to cater to overall downstream demand, thus supporting the Ethylene prices to follow a downtrend in the domestic market.
Europe
Ethylene prices have remained gloomy in the European market throughout the second quarter of 2023, backed by reduced production rates and limited downstream demand. The cost support from the feedstock Naphtha has been inadequate as its prices progressed in a downward trend in the given time frame. In addition, the energy Natural gas prices have dropped amidst weak end-user consumption and sufficient storage in the regional market. Furthermore, macroeconomic uncertainties like high inflationary pressure and rising interest rates by the European central bank to combat inflation have further deteriorated the market growth of Ethylene in the region. Demand from the downstream polyethylene industry has remained tepid in the regional market, with limited buying appetite noted across end-user industries. Market participants reported that demand for Ethylene will continue to decline further ahead of the summer holiday period. However, in an attempt to curtail consistent oversupply, producers have reduced their operating rates by 70-80%. In the meantime, import flow has been steady on the European ports as demand in the Asian market remained sluggish, and Asian exporters looked to send material onto European shores to take advantage of better arbitrage. This has led to sufficient inventories on the European shores.
Middle- East
Ethylene prices have continued to decline in the Saudi Arabian market throughout the second quarter of 2023, supported by weak demand and sufficient inventories. The cost pressure from feedstock Naphtha has been inadequate as its prices progressed downward in the given time frame. On the demand side, the inquiries from the downstream Polyethylene industry have subdued as consumption from the packaging as well as from the plastic industry has weak. Thus offtake of Ethylene has declined. At the same time, demand from the overseas market has also decreased amidst global economic uncertainties. In addition, Sadara Chemical in Al Jubail, Saudi Arabia, with a 1.5 million MT /year plant capacity, restarted its Ethylene unit in April 2023. The unit was shut down in Early February 2023 amid maintenance turnarounds. Furthermore, despite the weak downstream demand, the operating rates have remained normal in the domestic market as manufacturers speculate the further rise in demand. Moreover, the availability of finished stocks of Ethylene has remained sufficient to cater to overall downstream demand, supporting the downshift in the prices of Ethylene in the domestic market. The market participants reported no supply disruptions or port congestion in the given time frame.
For the Quarter Ending March 2023
North America
Ethylene prices showed fluctuation in the USA market during the first quarter of 2023. During the initial quarter, Ethylene prices dropped in the USA market. The decline in the prices was attributed to the sluggish demand from downstream polyethylene and glycol chain industries as consumer sentiment continued to remain weak in the US region due to ongoing holidays and sluggish growth of key end-user industries, including packaging industries amid seasonal dullness, while the inventories remained adequate to cater the overall demand. Although, during the mid and final quarter of 2023, Ethylene prices have gained upward momentum due to improved demand from the downstream industries and limited supplies in the market. Consumption from the downstream polyethylene and glycol value chain has also slightly increased, while the limited supply in the region forces the manufacturer to raise their price quotation. Additionally, Nova Chemicals has increased its polyethylene (downstream) prices due to force majeure on its polyethylene after an unplanned outage at its Corunna ethylene cracker in Sarnia, Ontario, Canada, has proportionally impacted the prices of Ethylene. Thus, prices of Ethylene FOB US Gulf were settled at USD 491/MT during March.
Asia- Pacific
During the first quarter of 2023, Ethylene prices have witnessed mixed sentiments in China. During January, Ethylene prices have inched lower due to weak demand from the downstream polyethylene industry and adequate supply in the region. In addition, import availability of Ethylene remained steady in Chinese ports from South Korea, Japan, and other exporting countries; thus, inventory levels have been termed as sufficient in the domestic market. Although, during February and March, Ethylene prices have increased since the conclusion of the Lunar New year Holidays as market participants restocked the material available in the market. In addition, consumption from the downstream polyethylene glycol value chain has improved substantially, thus increasing the demand pressure on Ethylene availability. The replenishment of downstream stocks has catapulted the demand for Ethylene. Furthermore, a major manufacturer of Ethylene, Zhejiang Petroleum and Chemical (ZPC) in Zhoushan, Zhejiang, China, having a production capacity of 1.4 million MT/year, took off-stream its No.2 cracker in early February 2023 for maintenance. On the other hand, PetroChina completed trial runs at a 1.2 million tonne-per-year ethylene facility in its newly launched refinery complex in south China, which may improve the supplies of Ethylene in the market. Thus, prices of Ethylene CFR Shanghai were settled at USD 926/MT during March.
Europe
Ethylene prices showed mixed sentiments in the European market during the first quarter of 2023. Initially, Ethylene prices remained stable due to consistent demand from the downstream polyethylene industry and ample supply in the region. However, in the mid-quarter, Ethylene prices increased significantly after the holidays as market participants replenished the available material in the regional market. Moreover, the rising feedstock Naphtha prices increased the production cost of Ethylene in Europe. Furthermore, the imported Ethylene prices remained comparatively higher than the regional prices as prices continued to rise in the Asian market. Despite this, the demand from the downstream polyethylene and glycol chain industry remained stable in the regional market, and market participants reported limited instances of new orders. However, during the final quarter of 2023, Ethylene prices experienced a downtrend backed by weak downstream demand and firm supply in the region. The imports from the Asian market remained firm, which led to better material availability in the region. Additionally, energy prices continued to drop, further weighing down the prices of Ethylene in the regional market. As a result, the prices of Ethylene FD Hamburg were settled at USD 940/MT during March.
For the Quarter Ending December 2022
North America
Ethylene prices have shown a see-sawed trend in the USA market during the fourth quarter of 2022. During the mid-quarter, Ethylene prices have witnessed a downtrend due to the weak demand from the downstream polyethylene and glycol chain industries. Feedstock Naphtha prices have decreased, which eased the production cost of Ethylene in the regional market. Although, during the mid-quarter, Ethylene prices improved owing to the high feedstock Naphtha prices. Demand from the downstream industries has revived slightly, resulting in increased prices. Furthermore, the supply chain has been impacted by the labor shortage and vessel bunching, thus limiting the material available in the region. Although, during the final quarter, Ethylene prices dropped due to the bearish demand from the downstream industries ahead of the seasonal dullness. In addition, a major manufacturer of Ethylene, Dow Chemical in Freeport, Texas, USA, has a capacity of around 725,000 Tons/year and experienced compressor shutdown amid a burst of sub-freezing weather, which impacted its production cost.
Asia- Pacific
Prices of Ethylene showed mixed sentiments in the Chinese market during the fourth quarter of 2022. During the initial of Q4, Ethylene prices showed a downward trend backed by excessive supply and weak demand. Furthermore, the ongoing lockdown measures in major cities amid rising pandemic cases lead to uncertainties in production, operation, and logistics. This exerted downward pressure on the end-user demand. Overall, consumption from downstream polyethylene, glycol chain, and other competitive industries has continued to remain on the weak side. Meanwhile, the cheap imports from South Korea, and Japan, have led to the better availability of the product. Although, Butadiene prices rebounded during the mid-Q4 because of the supply constraint, disrupted supply chains, and improved demand. Overall tighter supplies and limited inventories led to the price increase in the Chinese market. Further, during the final Q4, Ethylene prices gained stability due to the stable demand and supply dynamics. Thus, Ethylene CFR Qingdao was assessed at USD 873/MT during December.
Europe
Ethylene prices showed a mixed trend in the European market during the fourth quarter of 2022. During October, Ethylene prices dropped sharply by 8.8% owing to the weak cost pressure from the feedstock Naphtha prices. Moreover, demand from the downstream Polyethylene and Glycol value chain has slumped amid the high inflation rate in Europe. According to the Eurostat data, the European inflation rate increased from 9.1% to 10% in September 2022 compared to the previous month. However, during December, Ethylene prices rebounded. The domestic production cost has remained increased amid high energy and operating costs, resulting in weak output rates. In addition, the high cost of raw material Naphtha has resulted in the price increase. Despite this, demand from the downstream industries has remained on the weak side. Also, the major manufacturer of Ethylene, LyondellBasell, has announced that the Ethylene cracker at its integrated olefins and polyolefins production site in Berre, France, will not restart until early 2023 due to the persistently high energy costs, compressing margins, and falling demand for Ethylene in the region. Although during November, Ethylene prices again started to drop due to the lackluster demand from the end—user sector. The supply has been supported by cheap imports from the Asian market, which led to better product availability in the regional market. Meanwhile, domestic production cost has also stabilized amid stable energy prices in the region. In conclusion, prices of Ethylene FD Hamburg were assessed at USD 832/MT during December.
For the Quarter Ending September 2022
North America
Ethylene prices have been on a downward trend in the US market throughout the third Quarter of 2022, owing to the soft feedstock Naphtha prices and ample inventory levels amid weak downstream demand. Speculation of recession across the USA market has dampened the demand from the downstream Polyethylene and Glycol value chain. The performance of the packaging industry has been underwhelming during Q3; thus, the demand for PE and PP has remained weak throughout the Quarter. The ease in the upstream Natural gas prices has reduced the production costs of Ethylene across the regional market. In addition, the downstream market players have reported large stockpiles of unsold inventory, resulting in a cheaper spot market for Ethylene in the domestic market. As a ripple effect, Ethylene FOB US Gulf prices were offered at USD 487/MT, with a monthly decline of around 10.8% during September 2022.
Asia- Pacific
In the Asian region, prices of Ethylene have shown a mixed trend throughout Q3 of 2022. During July, Ethylene prices dropped by 3.3%, supported by sufficient inventories coupled with low demand from the downstream Polyethylene and other allied industries. However, during August and September, Ethylene prices rebounded due to the mounting inflation across the region. High Feedstock Naphtha and mounting energy prices have resulted in the high production cost of Ethylene across the regional market. In addition, LG Chem in Yeosu, South Korea (a major exporting country) has shut down its cracker due to a maintenance turnaround, resulting in a supply shortage across the region. Hence, as of September 2022, in South Korea, prices of Ethylene FOB Busan were assessed at USD 1095/MT.
Europe
Since the Russia-Ukraine war has risen, European countries have faced strong headwinds amid a crisis in natural gas supply and high inflationary pressure. The limited natural gas supply has inflicted downside risks on the manufacturing capacities of the downstream sectors. Ethylene prices have continued their bearish rally in the European market during the third Quarter of 2022, owing to the substantial availability of upstream Naphtha. The latest decline in the trend has been caused by a constant flow of cheaper imports from the APAC and North American regions. The domestic cost of production remains higher owing to mounting energy and operations costs, resulting in weak output rates. Demand from downstream Polyethylene and other allied industries has been weak due to growing speculations around recession deterring consumer sentiment. Also, the inflows of new orders dropped as demand for Polyethylene continued to decrease. In addition, LyondellBasell has reduced its operating rates to 60% in Germany amidst weak demand and high natural gas prices. Hence, prices of Ethylene FD Hamburg were assessed at USD 1000/MT during September.
For the Quarter Ending June 2022
North America
Ethylene prices in the US market were consistently rising throughout the second quarter of 2022. The rise in the price of Ethylene was primarily due to the increasing price trend of feedstocks ethane and propane. The increase in ethane and propane costs was due to increased natural gas prices in the domestic market due to increased European export rates. At the onset of Russia's invasion of Ukraine, Europe sanctioned bans on Russian oil and gas imports, and the US stepped in to meet Europe's gas needs, leading to rising natural gas prices in the domestic market.
APAC
In the Chinese market, the Ethylene price dropped throughout the second quarter of 2022. The steady supply of feedstock Naphtha and Ethylene from Japan and South Korea abetted the decreasing trend of Ethylene prices in the Chinese market. Due to low operation rates in refineries, Chinese Naphtha prices were low due to the Covid-19-related lockdowns and weak demand from the downstream margins. The strong supply of feedstock, Crude oil, and natural gas assisted the decreasing price trend of Ethylene in China. In the Indian market, Ethylene prices eased during the start of Q2 2022, but the prices rose sharply nearing the end of Q2 due to high demand from downstream industries.
Europe
Ethylene prices in the European market rose at high rates during the first two months of the second quarter of 2022. The high energy prices in Europe owing to the sanctions on imports of Russian oil and gas contributed to the price hike of Ethylene in the European market. The high crude prices raised the cost of feedstock Naphtha. The price of Naphtha started to decrease at the end of Q2 2022 because of increased fuel production under high demand, which produced Naphtha as a by-product. The decreasing Naphtha cost during the end of Q2 2022 brought down the price of Ethylene during the same time period in Europe.
For the Quarter Ending March 2022
North America
In North America, Ethylene prices decreased for the first quarter of 2022 with only a slight surge in January and then further declining in the upcoming months. The prices hovered around USD 829/ton- USD866/ton for Ethylene Spot FOB US Gulf. While there was a sudden fall of 18.8% in March in the USA. Q1 saw an overall decrease of 1.9% in the USA compared to the previous quarter of last year. Ease in refinery margins stabilized demand and continued supply chain disruptions throughout the quarter, albeit with improved rail car availability. Increased inventories and stockpiling caused the prices to deplete in the North American region.
Asia Pacific
During Q1 2022, Asia saw an increase in Ethylene prices where the price started at USD 1096/ton CFR Shanghai in China during the beginning of the quarter with a sudden spike of 10.5% increase in February. Naphtha-based crackers observed an escalation in production rates since mid-February as cost pressure from high oil prices has rendered refineries unable to realize any significant margins. Improved congestion at freight terminals and shipment cost was the reason for surging prices of Ethylene in India. Increased demand from downstream agrochemicals, cosmetics, and polymers sector and lesser supplies of raw materials in the market surged the cost of Ethylene.
Europe
Europe saw a fluctuation in the price of Ethylene during Q1 2022, with a sudden increase by the end of March in Italy and the UK in the middle of the quarter. Whereas the prices were observed to be increasing in Germany during the whole quarter with an increase of 5.4% compared to Q4 of 2021 and price hovering around USD 1371/ton and USD 1423/ton during February FD Hamburg. Cost pressure from upstream crude oil and gas prices could increase, which indirectly affected the price of ethane, propane, and butane. Mixed sentiments were observed in this quarter for Ethylene across Europe.
For the Quarter Ending December 2021
North America
After reaching an annual high of around 1250-1300 USD per Mt during Q2 in the post-deep freeze period when many refineries were either forced to shut down or declare force majeures, spot Ethylene prices had reached to 55% of the Q2 peak and had settled at 765 USD per Mt FOB Houston in the last weeks of December FY21. The fall in prices of natural gas for the most part of Q4 played a significant role in lowering the prices of Ethylene. Production was cut down by refineries from the Q3 (August and September) levels as aggressive restocking and diversion of exports from Asia towards Europe post deep freeze meant that there was a surplus of C2 in the domestic markets entering Q4. Thus, supply outmatched demand through most of the last quarter of 2021 further contributing to the downward pressure on prices. The outlook for Q1 of FY22 remains uncertain at least for the short term as global demand gets effected over concerns about the omicron variant spreading rapidly in most parts of the world. The deep winter freeze expected in the month of February could impact supply during Q1 just like the last year.
Asia
Asian Ethylene Market outlook for Q4 of FY21 could be summarized as volatile for the most part as the far east Asian region witnessed a surge in prices for the month of October owing mostly to the high cost of freight during that period as the region is import dominant. Average prices for Q4 were assessed at 1120 USD/ Mt for China on CFR Shanghai basis. The South-East Asian region too reflected a similar trend. The Middle East however witnessed a more stable market for ethylene with average price for Q4 at 1075 USD/Mt assessed on an FOB basis. Feedstock Naphtha prices during Q4 had also been assessed slightly higher compared to Q3 of FY21. Production was lower than the Q3 levels. India’s prices assessed on an Ex-JNPT basis averaged around INR 81500 for Q4 which is thirteen percent higher compared to the Q3 prices. The outlook for Q1 of FY22 could be bearish taking into consideration the fall in prices in the opening weeks largely because of concerns over the new variant that had already led to strict lockdowns and quarantine measures in China and some South-East Asian countries. Prices are however likely to rebound in the second half of Q1 as global supply tends to fall during that period.
Europe
European ethylene market suffered from supply side constraints combined with higher freight costs during the first half of Q4 FY21. Imports from North America were quoted higher than the previous quarter with average prices of Ethylene in North-West Europe assessed at 1355 USD/Mt FD Hamburg which is a 10 USD/Mt higher than the previous quarter’s average. Demand from the downstream polymers industry like polyethylene and polyvinyl chloride had seen a marginal increment compared to Q3 although the month December witnessed demand tapering off from most of the end user industries. The outlook for Q1 of FY22 is likely to be bullish considering the production cuts due to maintenance and deep freeze in the North American region which could affect supply in Europe.
For the Quarter Ending September 2021
North America
In Q3 2021, Ethylene prices traced a downward trajectory during this quarter in USA, after gaining tremendous highs in the previous quarter backed by the ample availability of the product as industries operated at high efficiencies in this quarter. US Ethylene witnessed a whooping rise in mid-July across Texas and Louisiana backed by the unplanned outages. In August, despite the climate calamity in the Gulf Coast of US, prices gained stability owing to the resumption in the production plants with little or no delay after the Ida Hurricane aftermath. Therefore, the FOB-US prices of Ethylene hovered around USD 1025/MT to USD 910/MT from July to September. Surging demand from downstream sectors is anticipated to push the prices of Ethylene in the upcoming months.
Asia
Asian market witnessed an exponential rise in the prices of Ethylene in the third quarter supported by an unprecedented hike in the values feedstock Naphtha. In addition, Ida hurricane in USA caused supply chain disruption that led to the crippled availability of feedstock Naphtha in the region. The Chinese Ethylene market showcased mixed sentiments in the quarter aided by the supply chain disruption caused by various factors such as congestion at several ports of China along with the lower imports from US. However, players kept their inventories at low levels to keep the upbeat sentiments. Ethylene prices in Indian market remained influenced by the upstream crude value, lower import from the USA, and soaring freight charges due to the shortage of shipping containers. In India, tightened supply led to the scarcity of the product in the domestic market that contributed to the inflation in the prices of Ethylene during this period. Therefore, Ex Mumbai Ethylene prices were assessed at USD 1022.59/MT in India witnessed a hike of USD 130.78/MT from July to September.
Europe
In Q3 2021, European market faced mixed sentiments for Ethylene across the region. A marginal surge in the values of Ethylene was observed from July to August backed by the limited availability of the product and higher logistic costs. However, in the later half of the quarter, Ethylene prices fell taking cues from reduced consumer purchasing power and ample availability of stock in the region. FR Hamburg Ethylene prices rose to USD 1002 per MT in August showcasing a slight hike of USD 4 per MT since July and then a decline of USD 37 per MT is in September.
For the Quarter Ending June 2021
North America
North America witnessed volatility in Ethylene prices during this quarter, backed by fluctuation in upstream crude values and uncertain demand from the global market. Revival in economic activities led to spike in demand for downstream polymers in USA. While due to insufficient plant operations, supply of downstream commodities remained short, and prices kept on rising throughout the quarter. The demand for Ethylene hovered toward the end of quarter, as the refining activities ran well, but the international demand declined with resurgence in pandemic cases in some European countries.
Asia
Asian market witnessed several price fluctuations during this quarter, which varied country over country. In India, Ethylene prices remained influenced by demand supply gap, resurgence in pandemic cases, upstream crude values and import-export activities. In April demand readily reduced due to sudden surge in pandemic cases in the country as it led to closing of market activities. In addition, in the mid of pandemic trading activities remained halted which also impacted the overall price dynamic in the country. Therefore, prices of Ethylene were accessed at USD 690/MT and USD 843.2/MT for China and India respectively during first week of June. In China, market also remained volatile that led to several negative fluctuations in the quarter, but most of the fluctuations were supported by supply gap in the country amidst demand stability.
Europe
European market faced mixed sentiments during this quarter for Ethylene across the region, as the demand fluctuated with resurgence in pandemic cases. Downstream polymer prices kept on rising during this period due to inadequate spot availability amid stable to firm demand from downstream end users. However, Ethylene prices kept fluctuating with changing crude values in the global market, where overall outlook remained bullish for Ethylene during this quarter for the European market.
For the Quarter Ending March 2021
North America
North America struggled to satisfy rising demand of Ethylene as several production facilities faced force majeure and unplanned shutdowns during Q1 2021. Eastman chemicals at Longview, Texas suspended its operations after arrival of icy weather during February. Its plant capacity is 730,000 MT Ethylene per year. Meanwhile, INEOS also has undertaken its Ethylene plant of capacity 1.88 million MT per year off stream located at Texas. Similarly, several other plants dented the regional supply chain of Ethylene that skyrocketed the prices of Ethylene and its derivative products globally.
Asia
The Asian market faced huge demand for Ethylene and its derivatives from downstream sectors which significantly supported its prices. In China, Ethylene demand suddenly surged after lunar holidays, but tight supply boosted the prices. Meanwhile, South Korean Hanwha’s 310 KTPA manufacturing unit went for partial shutdown in March. This shutdown was implemented to expand its production capacity and it is anticipated to resume its operation in early Q2 2021. Furthermore, in February 2021, Sinopec Yangzi petrochemicals in China, shut down its naphtha cracker of production capacity 450,000 tonnes Ethylene per year for maintenance, which later resumed its operations in March. Amid high demand from downstream products manufacturers, lower supply spiked up the prices of Ethylene across the region. In India, supply shortages during January to February pushed up the prices of Ethylene to USD 854 per MT which later came down again to USD 828 per MT in March in effect of improvement in supply activities.
Europe
The European market had a firm demand from downstream sectors, though the supply remained tight due to several reasons. Container shortages reduced the exports and imports of feedstock materials across the region and some unplanned outages reduced the global supply for Ethylene. Price trend in Europe overall remained up, amid high demand and constrained product availability.
For the Quarter Ending September 2020
Asia
Ethylene sentiments were heard muted-to-low, entering the third quarter on the back of ample supplies and stable demand. Sharp reduction in prices was observed in the first half of the quarter with offers bidding around USD 750-800/t CFR northeast Asia for July & August. However, as several major producers went temporarily offline by the end of the third quarter to balance out their inventory levels, supply started getting tightened. Singapore-based ExxonMobil shut its 1mn tpy cracker for its long overdue maintenance in mid-September till the end of October. To ease supply side issues, buyers in Southeast Asia were seen opting for deep-sea and Middle East origin cargoes. On the demand front, spot demand was bolstered by improved PE operations due to the expected return in demand during the peak season in several Asian countries.
