Asian Ethylene Market Stabilizes as Oil Recovery Improves Sentiment

Asian ethylene prices showed signs of stabilizing this week after nearly three months of continuous declines. The rebound in crude oil and naphtha prices helped improve market sentiment across Northeast and Southeast Asia, preventing further sharp losses. Although spot prices remained largely steady, market participants believe stronger feedstock costs could establish a short-term price floor, while a sustained recovery will depend on improvements in downstream demand.

Higher crude oil prices pushed naphtha values upward during the week, encouraging suppliers to raise their offers. However, buyers remained cautious as consumption across downstream industries continued to be sluggish. The price premium of CFR China over CFR Southeast Asia also narrowed to around $20/ton, reflecting the different pace of recovery across regional markets.

CFR China – Ethylene

Latest Price: $810/ton
Weekly Change: ▼ $20/ton
Bid Range: $800-810/ton
Offer Range: $870-900/ton

CFR Southeast Asia – Ethylene

Latest Price: $800/ton
Weekly Change: No Change
Bid Range: $790-800/ton
Offer Range: $870-900/ton

Southeast Asia Market Holds Firm

Ethylene prices in Southeast Asia remained stable despite higher offer levels. Recent transactions around $790-800/ton CFR Thailand are being viewed as a temporary support level, while buyers continued submitting bids well below sellers' expectations. The wider gap between bids and offers resulted in limited spot trading activity.

Although sentiment has improved with higher energy prices, market participants believe downstream derivative markets have yet to respond. As a result, any meaningful recovery in ethylene prices is expected to be gradual rather than immediate. Current prices also remain more than 50% below the highs recorded in early April.

Producers noted that higher naphtha costs continue to pressure cracker margins, with many plants requiring ethylene prices close to $900/ton simply to approach cash break-even levels.

Major Ethylene Plant Updates
PRefChem – Pengerang, Malaysia

Capacity: 1.29 million tons/year
Product: Naphtha Cracker
Status: Restarted in mid-June after a shutdown in mid-March.

Petronas #2 – Kertih, Malaysia

Capacity: 0.60 million tons/year
Product: Naphtha Cracker
Status: Restarted in late June after being shut since April.

Petronas #1 – Kertih, Malaysia

Capacity: 0.40 million tons/year
Product: Naphtha Cracker
Status: Operating at around 90% capacity.

Aster Chemicals & Energy – Pulau Bukom, Singapore

Capacity: 1.15 million tons/year
Product: Naphtha Cracker
Status: Running at 50–60% capacity following force majeure.

ExxonMobil – Jurong, Singapore

Capacity: 0.90 million tons/year
Product: Naphtha Cracker #1
Status: Permanently shut down.

PT Lotte Chemical Indonesia – Cilegon, Indonesia

Capacity: 1.0 million tons/year
Product: Naphtha Cracker
Status: Operating at approximately 65% capacity.

Long Son Petrochemical – Ba Ria-Vung Tau, Vietnam

Capacity: 1.0 million tons/year
Product: Naphtha Cracker
Status: Remains shut due to feedstock constraints; restart date yet to be announced.

Northeast Asia Sees Improved Sentiment

In Northeast Asia, ethylene prices softened at the beginning of the week before stabilizing as stronger crude oil and naphtha values lifted market confidence. Reduced operating rates and maintenance shutdowns at several Chinese crackers helped tighten domestic availability and supported spot prices.

Buyers gradually increased bids above $800/ton, while suppliers lifted offers to $870-900/ton in response to higher feedstock costs and ongoing geopolitical uncertainty in the Middle East.

Several Chinese production units continue operating below full capacity, while domestic ethylene prices eased slightly during the week. Despite stronger energy markets, downstream products such as PE, PVC, Styrene Monomer (SM), and MEG have yet to show a meaningful recovery.

South Korean producers continue operating at relatively higher rates while monitoring feedstock availability. In Taiwan, supply remains relatively tight as several major crackers continue running at reduced rates or remain under maintenance.

Outlook

Market participants believe crude oil and naphtha prices will continue to influence short-term market sentiment. However, a sustained recovery in Asian ethylene prices is expected only if downstream demand improves and derivative markets begin responding to higher feedstock costs.

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