Ethylene prices in Asia climbed higher last week, buoyed by supply constraints and reduced spot availability, even as downstream fundamentals remained weak.
An industry source told, that the upward move was largely driven by a shortage of September-loading cargoes, as producers across the region continued to run plants at reduced operating rates due to both scheduled and unplanned maintenance. “Asian ethylene prices have seen an increase lately, primarily due to constrained supply and limited availability of cargoes scheduled for September loading. Local producers were running their production facilities at lower capacities, which further limited supply. With fewer spot offers and delayed stock replenishment, buyers had little choice but to accept higher prices to secure cargoes,” the source explained.
Market participants noted that the price rally also drew support from steady demand in certain derivative sectors such as polyethylene (PE) and styrene monomer (SM). However, the optimism was tempered by weakness in PE and monoethylene glycol (MEG), where subdued consumption and thin margins left end-users hesitant to absorb higher feedstock costs. “Though constrained cargo availability and lower production rates have exerted upward pressure on ethylene prices, weak fundamentals in downstream sectors have dampened buyer interest,” another source said, adding that many converters remain cautious about procurement costs.
On Friday, FOB Korea ethylene was assessed at USD 795–805/mt and FOB Japan at USD 790–800/mt, both up USD 10/mt from the previous week. CFR Northeast Asia climbed to USD 835–845/mt, also higher by USD 10/mt, while CFR Southeast Asia moved to USD 825–835/mt, showing the same weekly gain. Despite these increases, trading activity in Southeast Asia stayed muted, with buyers largely refraining from spot purchases at elevated prices.
Plant developments also influenced sentiment. Ningxia Baofeng Energy is expected to shut its No. 3 coal-to-olefins unit in September, which includes 550,000 mt/year of ethylene and 500,000 mt/year of propylene capacity, though the length of the outage is unclear. Meanwhile, PetroChina Fushun Petrochemical shut its 850,000 mt/year cracker in Liaoning for maintenance earlier this week, adding to the tightness. In South Korea, Yeochun Naphtha Cracking Centre (YNCC) has idled its No. 3 cracker since August 8 due to poor market conditions, with no restart expected until profitability improves.
The combination of multiple regional outages and restrained operating rates has kept Asian ethylene prices supported, though participants remain cautious about the sustainability of the gains as downstream markets show little sign of a strong rebound.
