The petrochemical market in Asia got a boost last week from firmer upstream crude oil futures, with ICE June Brent crude futures gaining more than $1/b Friday compared to a week earlier. Eyes are still on the crude market this week, along with feedstock naphtha prices amid the steam cracker turnaround season.
AROMATICS
Asian paraxylene prices rose last week compared to a week earlier on stronger crude futures, and may continue to see support this week if the rally sustains.
Asian benzene prices, however, slipped last week as market participants were cautious amid plunging prices of downstream styrene monomer in China. Inventories in China also continued to hover at high levels, with stocks in the major port of Jiangsu estimated to be 12,300 mt higher on the week at 211,900 mt last Friday — indicating weaker demand versus incoming supply, which should also weigh on prices this week. Talk in the market also revolved around changing trade flows, with Petro Rabigh’s Phase II operational, while Vietnam’s Nghi Son refinery was expected to start shipping commercial product early May.
Asian toluene was buoyed last week by stronger crude. Demand and supply fundamentals were, however, viewed as less promising, given muted demand and the naturally long market. Nonetheless, the influence of energy markets will continue to supersede these concerns this week.
OLEFINS
The Asian ethylene market came under pressure last week, with spot prices slipping $20-$35/mt week on week to a one-month low. Market sources said bearish sentiment would likely continue, as deepsea ethylene supplies continue to flow to the region in May.
Asian propylene markets rose on the back of firm downstream demand last week, and may continue to see support this week as spot availability remains tight in South Korea.
Meanwhile, in the Asian butadiene market, tight supply concerns were offset by weak synthetic rubber demand, leading to a stable market last week. BASF-YPC’s 130,000 mt/year butadiene extraction unit in Nanjing, China, began scheduled maintenance last week, tightening supply. In addition, 5,000 mt of South Korean butadiene is moving to the US over H1 May.
MTBE, METHANOL
Asian MTBE tested new highs last week, supported by higher crude and gasoline prices. However, inter-octane spreads began seeing resistance last week, leading to a slip in the MTBE factor, as blending economics worsened. Nonetheless, if the energy markets continue their uptrend, MTBE will remain supported, despite weakening blend value.
Asian methanol prices rose last week in China and South East Asia, but the uptrend will possibly be short-lived this week, as Brunei Methanol Company restarted its 850,000 mt/year plant last Friday after an unexpected shutdown two weeks ago. An inventory build-up at the East and South China ports last week, by 4% week on week to above 400,000 mt, will also weigh on import interest.
