Ethylene prices in Asia are rising due to high demand in China and limited supply amid the Lunar New Year, ICIS reports, citing sources in the market.

The direction of prices after the holiday will depend on the prices of raw materials.

It will also depend on the amount of additional supplies that will be available due to the reduction in load at the enterprises, and the availability of products from Europe.

Prices that were set at a 14-week high rose more than USD200 per tonne since January 14.

The demand for the spot was supported by production problems in Asia and Europe, unhurried contract negotiations and concerns about a reduction in supplies from South Korea in the run-up to the repair period for cracking units from March to June.

Deals on ethylene for deliveries at the end of February and March to China were concluded at USD1,050–1,100 per tonne, CFR Northeast Asia, compared with USD992.50 per tonne, CFR Northeast Asia on January 25th.

Earlier it was reported that the contract price of ethylene in Europe for February deliveries was agreed at the level of EUR985 per tonne, which corresponds to the level of January.

Ethylene is the main raw material component for the production of polyethylene (PE).

According to the ICIS-MRC price review, in Russia the demand for PE in January was low and by the end of the month it decreased even more. Many companies have already closed all their needs for PE in the current month and took a pause until February. Excess supply remains in all segments of consumption, the greatest surplus in the segment of film PE. Last week, amid a surplus, some sellers went for further price reductions. Sellers are trying to sell their quotas as much as possible in order to enter the next month with empty stocks.