Plastics pricing information supplier ChemOrbis is reporting that spot prices for ethylene and propylene in Asia have posted significant declines over the past week to reach their lowest levels in months. Slack demand and the drop in crude oil and naptha prices are supporting this downward trend. On the styrenics front, global polystyrene offers are generally down but prices for HIPS retain their large premium over GPPS due to the high cost of butadiene and tight HIPS supply.
According to ChemOrbis, spot ethylene prices on a CFR Northeast Asia basis have fallen by around $50/ton over the past week to reach their lowest levels since the middle of January. When compared with the start of the month, spot prices on a CFR Northeast Asia basis are down by around $120/ton. Poor demand for major ethylene derivatives such as polyethylene (PE) is the main reason for the decline in prices.
According to data from ChemOrbis Price Index, spot prices for LDPE film grades on a CFR China, cash basis have fallen by $20-40/ton since the first full week of May while HDPE film grade prices have dropped $40-50/ton and LLDPE film grade prices have declined by $50-70/ton over the same time period. The majority of overseas suppliers of HDPE and LLDPE film grades are currently operating below their theoretical production costs based on spot ethylene prices, reckons ChemOrbis, as PE prices have been pulled lower by poor demand, helping to reinforce the downward movement in ethylene prices....