Asian petrochemicals tumble to multi-year lows as crude plunges on demand woes
October 20, 2014 – Asian petrochemical prices have dropped sharply amid tumbling crude values due to concerns about global growth and demand, Platts data showed October 16.
Overnight in the US, Front-month NYMEX crude settled down 6 cents at $81.78/b on October 15 — a level last seen in mid-2012 — while ICE November Brent ended down $1.26 at $83.78/b, almost a four-year low.
AROMATICS: PX NEAR 4-YEAR LOW, BENZENE AT 27-MONTH LOW
Asian paraxylene fell $16/mt day on day to be assessed at $1,066.50/mt CFR Taiwan/China October 15 — a near four-year low — on bearish crude as well as continued weak demand. It had risen $4/mt day on day October 14 after successive declines since late September. The CFR Taiwan/China marker was last assessed any lower on October 1, 2010, at $1,065/mt, data showed.
Asian PX prices have been falling since late September due to new PX startups in the region — Jurong Aromatic’s 800,000 mt/year plant in Singapore and ONGC Mangalore Petrochemicals Limited’s 900,000 mt/year plant in India — as well as weak feedstock naphtha prices, market sources said.
Due to the lower naphtha prices, operation rates at reformers will likely be higher which will result in increased PX supply, said sources.
Naphtha was assessed at $710.63/mt CFR Japan October 15, down $33/mt day on day.
The last time the marker was any lower was on June 25, 2012, at 707.25/mt CFR Japan, data showed.
A weak downstream purified terephthalic acid market also pulled down PX, and although the peak winter demand season when polyester buying rises for New Year is approaching it has not improved PTA prices.
Better run rates at PTA plants has not supported feedstock PX prices as demand was not enough to mop up excess PX supply. The higher PTA runs instead has lengthened PTA supply, lowering its price and in turn further putting pressure on PX, sources added.
FOB Korea benzene fell to 27-month low on October 15 to be assessed at $1,075/mt. The last time the marker was assessed any lower was on July 2, 2012, at $1,071.50/mt, data showed.
Asian benzene has been on a downtrend since mid-August this year as demand from the US eased amid increased cargo arrivals from Asia, and softer downstream styrene monomer and phenol demand. There has been a strong connect between the Asian and US markets this year due to an open arbitrage between the regions for most of 2014.
The recent tumble in crude also contributed to poor sentiment in the Asian benzene market, with the FOB Korea marker shedding more than 11% of its value over the past week. It was assessed at $1,198.50/mt October 8, compared with $1,075/mt October 15.
Asian styrene monomer prices have also come under pressure due to weak demand from China’s construction sector with markers falling 17.3% since the start of the year.
The FOB Korea marker was assessed at $1,398.50/mt and CFR China at $1,425.50/mt on October 15, the lowest since August 1, 2012, when CFR China was assessed at $1,422/mt, and since July 31, 2012, when FOB Korea was assessed at $1,377.50/mt, data showed.
GASOLINE BLENDSTOCKS: MTBE TUMBLES to 47-MONTH LOW
The FOB Korea toluene marker fell to more than a two-year low October 15 to be assessed at $951/mt, down $16/mt from October 14, on the back of sharply lower crude values.
It was last any lower on June 4, 2012, when it was assessed at $941.50/mt, data showed.
Demand for toluene in China has come under pressure recently amid an array of challenging market conditions including cheaper gasoline blendstock alternatives such as mixed aromatics, limited availability of credit in a tough economic environment and slowing GDP growth in the country.
Alternative gasoline blendstocks like MTBE remain a considerably cheaper alternative to toluene. FOB Singapore MTBE was assessed at a 47-month low of $901/mt October 15, down $31/mt from $932/mt on October 14.
Prices were dragged down on lower gasoline prices and weak crude futures. It was last assessed any lower on December 1, 2010, at $889/mt FOB Singapore, data showed.