Japanese Chemical Trader blog

Japan Chemical Trading Blog

Increase in Ethylene Price in Asia

According to an article in the Nikkei Newspaper dated July 12th, the “Spot price of ethylene has increased and is now approximately 1,520 USD/ton in East Asia, up 6% from a month ago”.

Ethylene is the most essential base ingredient for petrochemical products, and in Japan, it is produced through thermal decomposition of naphtha.
However, Japan is at a great disadvantage in price competition compared to some countries, including the U.S., where ethylene is produced from ethane that is obtained from shale gas.

The underlying reasons for the increase in price are that the supply quantity has decreased due to frequent periodic maintenance in ethylene plants in Asia and that the demand for ethylene has increased in China due to increase in production capacity of polyethylene derivatives.
There is also speculation that the export volume to Taiwan will increase due to production problems at a Taiwanese manufacturer.

Recently, the price difference between ethylene and naphtha has increased to over 500 USD/ton.
Since it would be difficult for Japanese companies in terms of structure to maintain long-term competitiveness, they need to promote capacity reduction in a planned way.