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Ethylene from NE Asia diverted to SE Asia on lacklustre demand from China

August 27/2009
August, 27 ( -- Trading activity has come to a virtual standstill in NE Asia on weak ethylene demand from China as talks with traders had lapsed due to a wide buy-sell gap. Cargoes intended for this region have been diverted to SE Asia in a bid for better price realisation as per ICIS. Selling ideas were pegged at up to US$1020-1030/ton (?714-721/ton) CFR NE Asia for cargoes arriving in September while buying ideas in the region hovered in the low to mid US$900s/ton CFR NE Asia. 

Expected cracker start-ups have also added to expectations of abundant domestic supplies and Chinese buyers have no incentive to seek spot cargoes. Lack of demand from China has left the northeast Asian market without direction for the third consecutive week.

Spot supply from Korea was limited with bulk of its ethylene output being fed into derivative polymer plants that were running hard on the back of healthy export demand but Japan has cargoes available due to turnarounds at downstream plants in September and October. Discussions between producers and traders were heard in the low US$900s/ton on FOB basis although some market participants said there had been deals done below these levels. September is (the end of) the first half accounting period in Japan so inventories should be reduced. 

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