The hottest Asian PE producers consider reducing p

2022-07-31
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Asian PE producers consider reducing production

according to sources, the high price of ethylene in Asia has led to the plight of long-term loss of profits for most ethylene derivatives. Some MEG and PE producers have to consider reducing the operating rate of their units or closing the whole production line

from another point of view, the decline in production may help reduce the over inflated ethylene inventory, which will lead to tight supply and create conditions for the rise of spot prices in April

last Friday, the CFR price of ethylene in China was $1515/ton, down $55/ton from the highest price in five years and six months in January, but still the highest spot price since August 2008

in the past three weeks, the price of ethylene has increased by $55/ton (from $1460/ton on February 17)

the shutdown or impending shutdown of cracking units in Asia is the main reason for the recent rise in ethylene prices. In June, Japan's ethylene production will drop significantly due to the shutdown of units

currently, the cracking units of Japan Asahi and Taiwan PetroChina Co., Ltd. are being shut down for maintenance. In addition, starting this week, the cracking unit of Japan's Dongcao in Siri city and the cracking unit of Japan's Showa electric in okubei city will be shut down for maintenance. In addition, the source said that the cracking unit of Shanghai Secco in Caojing, China, will also start a two-month overhaul on March 10

based on these overhaul plans, ethylene supply in Asia will be limited

in fact, without protection, the service life is long. Due to the tight supply and attractive prices in Asia, some European producers have exported ethylene to Asia in the past few weeks, while Europe itself is a net import market for ethylene

at the same time, due to the high inventory level, ethylene derivatives manufacturers are still unable to pass on the cost increase to their customers

"we are losing money, and we are also considering closing a production line." A MEG manufacturer said. He pointed out that the overall market sentiment in Asia is pessimistic

"the price is too low. For MEG manufacturers, such price is far from the profit point." A trader said

last Friday, megcfr China quoted us $940/ton

last Friday, the c+f quotation in the Japanese naphtha market was US $921/ton, and the difference between MEG and naphtha was only US $19, far lower than the profit difference of US $150

pe producers also face the same dilemma. They point out that selling ethylene back to the market is more profitable than manufacturing derivatives. After the experiment, we can recall the experimental curve

"we plan to reduce the operating rate of HDPE device by about%. Considering the current raw material market, especially the high price of C2, the net profit from the sale of some C2 will be better than that of PE." One manufacturer said. Formosa Plastics has lowered the operating rate of PE plants in Mailiao and Linchuan from the original 90% to%

last Friday, the spot price of film grade HDPE was $1515/ton, LDPE was $1570/ton, LLDPE was $1505/ton, CFR Northeast Asia

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