The ethylene market in Asia started to bottom out after reaching a record low at the end of April. So far (May 25) the price of ethylene monomer in Northeast Asia is US $ 672-680 / ton, and the price of ethylene monomer in Southeast Asia is US $ 612-620 / ton. In just over a month, Asian ethylene rose by 284-344 US dollars / ton. What is the reason for the rapid rise in the price of the ethylene market? The following editor will make a brief analysis of the recent trend.
Crude oil bottomed out
Naphtha, as a raw material for the cracking of the ethylene industry, gives Asian ethylene important guidelines. Crude oil prices moved upwards driven by optimism. Since April 22, its price has gone out of a magnificent doubling. The Brent 07 contract rebounded 85% from the lowest point, and the WTI 07 contract rebounded 100% from the lowest point. This is mainly due to the first. Since May, OPEC + production cuts have been carried out well, and the prospects for demand have gradually improved, and the oversupply worries have eased. Second, the U.S. crude oil inventories have declined, while the number of U.S. oil and gas rigs has continued to decrease. .
Tight supply
Domestic demand has been strong, and with the closure of Eurasian arbitrage, the overall supply of the market continues to be tight due to the overhaul of multiple sets of equipment between China and Japan and the low operating rate of domestic MTO.
Strong demand
The downstream derivatives styrene, ethylene oxide, and PVC have good profits and are still the main source of demand. The operating rate of the domestic styrene plant has now returned to about 80%, which has brought growth expectations to the ethylene market demand. The enthusiasm for procurement in the Asian ethylene market has increased significantly.
In summary, in the short term, Asian ethylene prices may remain strong.
Ethylene and LLDPE.bmp
Polyethylene (PE) is a polymer made from the polymerization of ethylene. Although ethylene monomer accounts for about 80% of the production cost of polyethylene, the price of ethylene and the price of polyethylene are not well synchronized. Compared with the singularization of ethylene prices, the polyethylene market prices in May appeared to change a lot, and the overall trend was volatile. After the "May Day" long holiday, there was an increase in on-site positives, and upstream, futures and petrochemicals pulled up, and some prices showed an upward trend. However, the operation enthusiasm of downstream factories is always difficult to mobilize, and it is difficult to completely change the market. In the second half of the month, the previous progress failed to continue, and the market turned to consolidate. The current impact of ethylene prices on downstream products, polyethylene, has gradually faded, but it is not without relevance, but the market price transmission coefficient has decreased. Later supply and demand fundamentals are still the main factors affecting polyethylene price fluctuations.
Later trend
Affected by the lack of supply, the price of ethylene in June may remain strong. However, the market was expected to be weak in July due to the restart of equipment and European arbitrage. As for the polyethylene market, part of the imported goods were concentrated in Hong Kong from the end of May to the beginning of June, and the supply situation was not optimistic. In addition, the downstream demand was obviously shrinking. Fortunately, upstream costs continue to support the market, and the possibility of a sharp decline in the short-term polyethylene market is unlikely. |
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