Terneuzen-Rotterdam stretch of ARG Pipeline in maintenance until end-March: market sources

New York — The western stretch of the ARG Pipeline -- the delivery system for the inland European ethylene market -- is undergoing maintenance expected to last until the end of month, market sources said March 8.

ARG, the Germany-based company that runs the pipeline, did not immediately respond to requests for confirmation. The company's website, however showed the live map of the pipeline between Terneuzen, the Netherlands, and Rotterdam is shaded red/orange, compared with blue along the rest of its length.

"I have heard that the ARG is interrupted ... for planned maintenance," a consumer source said.

"People cannot get the ethylene in the Rotterdam or Antwerp area," a second consumer source said. " I did see that people wanted to put ethylene into the west side of the market."

The maintenance started at the beginning of March, ahead of the start of the second quarter, when European cracker turnaround season is due to begin, market sources said.

As a result of the supply interruption in the western end of the pipeline, sources suggested the eastern segment of the pipeline may have become a bit longer in supplies.

"So, length on the eastern side," the second consumer said. "If there is some length, they (producers) cannot get of rid of it."

Some sources pointed to market fundamentals having switched or flipped between the inland market and the export or coastal market, with the latter supported by firmer US and Asian spot prices seen the week ended March 6.

However, derivative demand for polyethylene was strong, with spot and contract prices having hit all-time highs the week ended March 6, and it was also expected to lend support to the inland market prior to the start of Q2 turnaround season.

European spot ethylene was assessed at Eur1,030 ($1,221/mt) FD NWE on March 8, up Eur3/mt on the day, whilst the CIF NWE spot prices were assessed at $1,210/mt, down $1.50/mt on the day.

US Gulf Coast spot Mont Belvieu ethylene was assessed by S&P Global Platts at 57 cents/lb ($1,256/mt) a six-year high on Mar 5, whilst CFR Asian spot prices were assessed at $1,200/mt March 8.