Singapore — The Asian petrochemicals market saw mixed sentiments across the product groups, namely olefins, aromatics, polymers and intermediates.
In China, the value added tax reduction to 13%, from 16% earlier, would kick in on April 1, Monday.
The explosion at Jiangsu Tianjiayi Chemical’s chemical plant in Yancheng, Jiangsu earlier has intensified safety checks at petrochemical plants.
OLEFINS
Sentiment in the Asian ethylene market is likely to remain bearish this week after a $70-$75/mt week on week decline last Friday. Spot ethylene demand is likely to remain limited this week due to negative margins for most downstream production. Spot supplies, on the other hand, are expected to be available due to some downstream plant hiccups in Singapore.
The Asian butadiene market continued on a downtrend with April cargoes still heard unsold. In Southeast Asia, a company source from Malaysia’s Refinery and Petrochemical Integrated Development, or RAPID, said that its latest target was to load its first butadiene shipment by Q2, “tentatively in May”. In South Korea, the turnaround season continues.
Demand in the Asian propylene market was lackluster in the week to Friday as market participants continued to stay on the sidelines awaiting a clear price trend. Local prices in Shandong and east China weakened amid rising inventories of local cargoes.
AROMATICS
Asian paraxylene prices maintained its upward momentum from Thursday, rising $7/mt day on day to be assessed at $1,048.67/mt CFR Taiwan/China and $1,029.67/mt FOB Korea Friday, tracking gains in downstream purified terephthalic acid market. On a week-on-week basis, the markers were up $1/mt.
Asian benzene prices tracked a steep fall for most of the week, rebounding slightly on Friday, but closed the week $70/mt lower from a week ago at $556/mt Friday. Multiple factors contributed to the weakness in the market, including safety checks at downstream plants in the Jiangsu region, a plant shutdown at a styrene plant in Southeast Asia, and logistical limitations around securing vessels out of Asia into Europe and the US. The spread between FOB Korea and the EU stood at $93/mt Friday. Despite the open arbitrage, market sources said that there had yet to be cargoes seen working the East Asia-Europe route, amid the time lag and price risk involved. Nonetheless, traders were heard still eyeing opportunities to move material out of Asia to the EU, but said that securing space on vessels was difficult.
Asian styrene monomer fell sharply on the week as the slow pick up in consumption weighed on sentiment. Prices were on a downtrend, although inventory data showed a drawdown as consumption was perceived to be slower than expected. Unless there is a significant decrease in stockpiles, it would be tough for prices to strengthen, market sources said. Stricter safety checks in Jiangsu would have an impact on styrene and its downstream plants in China, market sources said.
POLYMERS
Asian low density polyethylene prices were stable on the week amid thin trade. Market sources said the upcoming Ramadan season in Southeast Asia and the tomb sweeping holidays in China had stalled trade discussions. Producers said operating rates had been lowered slightly as integrated margins had not been healthy, and subsequently pointed out that ethane-based PE would overtake naphtha as the predominant feedstock in the second half of the year once the US’ shale-based capacities stabilize.
INTERMEDIATES
Fundamentals in the Chinese and Indian methanol market for second-half April and early-May look slightly bearish with the restart of Iranian methanol producers, Marjan Petrochemical Company and Kaveh Methanol Company last week. Chinese market participants said Marjan will load cargoes for China in early April, while a Kaveh source said it will load cargoes for India and China at the end of this month. Buying appetite from China’s three major methanol-to-plants remains healthy, but price remains a major determinant, trade sources said. Elsewhere in Southeast Asia, fundamentals look balanced with Malaysian Petronas Chemical’s 1.7 million mt/year and 660,000 mt/year plants running at close to full capacity.
Overall market sentiment for Asian monoethylene glycol is likely to remain weak amid a supply glut. There is around 1.357 million mt of inventories at the main ports of eastern China last Thursday, almost unchanged week on week, market sources said. MEG was assessed flat day on day at $610/mt CFR China on Friday.
Nevertheless, demand from the downstream polyester sector has almost fully recovered, with the operating rate of the polyester and textile sectors at around 91% and 86% of total capacity, respectively, in China.
On the other hand, market fundamentals for related purified terephthalic acid will stay strong this week given tight supply amid intensive planned and unplanned production cuts or shutdown in end-March and April. Meanwhile, there are still many uncertainties in the PX and PTA market depending on the status of the start up of Hengli’s new PX plant, on top of failed major settlement for PX April ACP last Friday.
–Regina Sher, [email protected]
–Edited by Norazlina Juma’at, [email protected]
Source: S&P Global Platts
