Southeast Asia ethylene costs dropped on crackers restart

Ethylene prices based on CFR Southeast Asia term fell $15/ton on Wednesday (20 July), returned to the levels last seen in late June, on expectation that supply within the region might improve in the near term with the restart of regional crackers. Market informed Shell Singapore has achieved on-spec output from its troubled cracker earlier this week, after almost nine months shutdown due to major technical malfunction.

The main question players have in mind now: Is this just the start of the trend?

Industry participants believed that any possibility of further reduction would be capped as demand for ethylene from the downstream market, especially from the styrene monomers (SM) sector remains strong as SM plants ramp up production rate before entering maintenance shutdown season in September. Besides, several other major crackers in Fareast region also planning for overhaul in the near term, which in effect, would shorten live of the downtrend.