ICIS REPORTS (5 October 2019)

ICIS REPORTS (5 October 2019)

08/10/2019 Share
ICIS REPORTS (5 October 2019)

ETHYLENE:

EUROPE:

Q2:

Planned cracker maintenance got under way from
mid-April, albeit a little slower than planned at Shell’s
Netherlands cracker because of strike action. Together
with unplanned outages, this led to a tightening of
ethylene supply and spot prices steadily rose. Europe’s
high cost position relative to the US and Asia saw good
availability in terms of imports, although logistics issues
hampered some trade. By the end of the quarter,
turnarounds were ending.
 
Q3:
Planned maintenance outages should be complete by
mid-July and with no scheduled downtime due until H2
August, supply is expected to lengthen. Several crackers
will be off line from mid-August to October, but these
are not concentrated in one area like previously, so any
further production disruptions should be more
manageable.
 
ASIA:
 
:Q2
Supply was long following widespread cuts in
downstream monoethylene glycol (MEG) production.
Major MEG makers in Asia and the Middle East
offloaded a substantial quantity of ethylene after
lowering derivative output in response to weak margins
and poor Chinese demand. Exports from southeast Asia
and Japan were boosted by downstream turnarounds
and technical issues, helping to offset a decline in
shipments from South Korea where cracker operations
were curtailed by turnarounds and production issues.
 
 
Q3:
South Korea’s production will increase after the
completion of cracker turnarounds in June and ahead of
a 310,000 tonne/year expansion at Hanwha Total
Petrochemical’s plant in July. Shipments from producers
with MEG capacities could fall following improved
derivative conditions. Southeast Asia’s supply glut may
ease because of several cracker turnarounds from
August.
 
 
POLYETHYLENE:
 

EUROPE:

:Q2

Polyethylene (PE) supply in Q2 was ample. Some

imported grades were not as available as many sources
had expected, but nevertheless there was enough
availability of all grades. Lengthy supply had no impact
on pricing as crude and naphtha were strong, although
spot prices began to erode as upstream naphtha fell. By
the end of the quarter, new imported quantities -
particularly from the US - were being oered for July
delivery.
 
 
Q3:
More PE imports are widely expected to be available
from July onwards - mainly for C4 (butene based) linear
low density polyethylene (LLDPE) and high density
polyethylene (HDPE) - from new plants in the US, and as
prohibitive duties on US material into China are applied.
European cracker rates remain high.
 

ASIA:

:Q2

Q2 supply in China was stable as the new Jiutai Energy
plant ran at a relatively low operating rate in May. China
import volumes fell as it became a less lucrative market
due to lower prices. Regional southeast Asian supply
was healthier as ethylene prices weakened substantially
in the later part of Q2, making it more economical for PE
producers to ramp up production. Import supply from
the Middle East, India and US remained healthy.

 

Q3:

Supply is likely to increase amid higher operating rates

of local producers while several plant shutdowns in
southeast Asia might tighten regional supply. Import
supply to China shall remain healthy amid better
netback. PE producers might continue to ramp up
production should naphtha and ethylene prices remain
relatively low.