The load of Korean crackers increased significantly in March

Recently, Standard & Poor's Global announced that according to the agency's calculations, South Korea's naphtha feed cracking operators expected an average load of 87.96% in March, up from 75.89% in February, while olefin production margins were still low. The data show that the operating rate of South Korea's total production capacity in March is expected to be 80.09%, higher than 72.58% in February. Market sources said some operators started increasing operating load factors in February with the aim of building up ethylene inventories ahead of the April and May shutdowns. "As ethylene production margins are still low, we have no plans to use more ethylene for spot sales at the moment," said an ethylene supplier.

When to restart cracker operations after a planned outage will depend on whether olefins margins improve, the sources said. Currently fully integrated crackers can sustain production at current olefins prices, but naphtha-ethylene spreads are still below breakeven for other operators.

According to S&P global data, petrochemical producers are paying close attention to the physical price difference between ethylene prices in Northeast Asia and Japanese naphtha prices in the key market. When Asia closed on March 8, the price difference between the two widened by US$49.88/ton to US$218.25/ton. tons, but still below the typical breakeven point of $350/ton for non-integrated ethylene producers and $250/ton for integrated ethylene producers.