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Asia: Higher European prices lure Mideast, US ethylene away from Asia

https://www.chemnet.com   Jul 26,2010
Higher European ethylene prices are luring Middle Eastern and US cargoes
away from Asia, which was the target region for sales just a few weeks ago,
said market sources Friday.


In the past week, South East Asian ethylene spot prices have stayed flat
at $797/mt CFR, while North Western Europe prices were at $944/mt CIF
Wednesday.


According to shipping reports, Japanese trader Marubeni has sold 4,500 mt
of ethylene from Rabigh, Saudi Arabia, for early July loading to a destination
European. Western trader Centrotrade has also fixed a 4,500-mt spot cargo from
Bandar Imam Khomeini, Iran, for early-August loading to Europe.


For the US, Japanese trader Mitsubishi sold 6,000-7,000 mt of spot
ethylene from Houston to Europe for loading July 26-28.


One more 4,500-mt spot cargo was heard to be available from Iran's Bandar
Imam Khomeini for end-July loading. Iranian trading house Petrochemical
Commercial Co. was handling the cargo, but the destination of the cargo was
not clear.


Typically, spot cargoes from the Middle East are sold to Southeast Asia
due to better logistics -- such as storage tanks and discharging terminals,
while some end-users in Europe do not have logistics good enough to take the
large-sized -- of around 5,000-6,000 mt -- Middle Eastern cargoes.


But this time, Middle Eastern material found home in Europe, where spot
ethylene prices were pegged higher than in Asia.


There is no demand for ethylene in Southeast Asia, said sources, as the
region remained oversupplied with Middle Eastern cargoes.


Supporting this view, one Japanese trader noted that "higher" European
prices were also luring Japanese traders to move ethylene cargoes away from
Asia, with supply for prompt July heard to be tight in Europe.
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