Petrochemical Outlook in Asia, April 1

Singapore –
The Asian petrochemical market has generated mixed feelings among product groups, namely olefins, aromatics, polymers and intermediates.

In China, the reduction of the value added tax to 13%, against 16% previously, would come into effect on Monday, April 1st.

The explosion of Jiangsu Tianjiayi Chemical Chemical Plant in Yancheng, Jiangsu, has intensified security controls in petrochemical plants.

OLEFINS

The trend in the Asian ethylene market is expected to remain bearish this week after falling from $ 70 to $ 75 / mt over the week last Friday. Spot ethylene demand is expected to remain limited this week due to negative margins for most downstream production. On the other hand, one-off supplies are expected to be available due to some downsizing of factories downstream in Singapore.

The Asian market for butadiene continued its downward trend, with April shipments still not sold. In Southeast Asia, a refinery and petrochemical integrated development company in Malaysia, or RAPID, said its latest goal was to load its first shipment of butadiene by the second quarter, "tentatively in May ". In South Korea, the recovery season continues.

Demand in the Asian propylene market was dull during the week until Friday as market participants continued to sit on the sidelines, while waiting for a clear price trend. Local prices in Shandong and East China have declined in response to rising local cargo stocks.

AROMATIC

Asian paraxylene prices continued to rise from Thursday, rising by USD 7 / tonne per day to USD 1,048.67 / m CFR Taiwan / China and USD 1,029.67 / m FOB Korea Friday, reflecting the downstream market gains of purified terephthalic acid. On a weekly basis, markers increased by $ 1 / mt.

Asian prices for benzene followed a steep drop for most of the week and rebounded slightly on Friday, but ended the week down $ 70 / m from last week, at $ 556 / mt on Friday. Several factors contributed to the weakness of the market, including security checks carried out in the downstream factories in the Jiangsu area, the closure of a styrene plant in Southeast Asia and the logistical limitations imposed on the market. securing ships from Asia to Europe and the United States. The gap between FOB Korea and the EU is set at $ 93 per tonne on Friday. Despite public arbitration, market sources indicated that there had not yet been any cargoes taking the route East Asia East, given the time lag and price risk incurred. Nevertheless, traders were heard, always looking for opportunities to transfer materials from Asia to the EU, but said it was difficult to secure space on the ships.

Asian styrene monomer fell sharply during the week, as slowing consumer spending weighed on investor sentiment. Prices showed a downward trend, but inventory data showed a decrease as consumption was seen to be slower than expected. Unless there is a significant reduction in stocks, it would be difficult to boost prices, market sources said. Stricter security checks in Jiangsu would have an impact on styrene and its downstream plants in China, sources in the market said.

POLYMERS

Asian prices for low-density polyethylene remained stable over the week despite limited trade. Market sources said the upcoming Ramadan season in Southeast Asia and China's dream holiday had blocked trade talks. Producers stated that exploitation rates had been slightly reduced as integrated margins were not sound, and then pointed out that ethane-based EP would overtake naphtha as the predominant raw material in the second half of the year, once American capacities based on shale will have stabilized.

INTERIM

The fundamentals of the Chinese and Indian methanol market for the second half of April and early May seem slightly bearish with the revival of Iranian producers of methanol, Marjan Petrochemical Company and Kaveh Methanol Company last week. Chinese market participants said Marjan would load shipments for China in early April, while a source in Kaveh said it would load shipments for India and the United States. China at the end of the month. The appetite of buying the top three Chinese methanol companies to the factories remains healthy, but price remains a determining factor, commercial sources said. Elsewhere in Southeast Asia, the fundamentals are balanced with the 1.7 million tonnes / year and the 660,000 tonnes / year of Petronas Chemical plants in Malaysia, operating near full capacity.

The general opinion of the market regarding Asian monoethylene glycol should remain low despite an overabundance of supply. There are about 1.357 million tons of stocks in major ports in eastern China last Thursday, almost the same week, sources of the market said. MEG was valued Friday at $ 610 / mt CFR China.

Nevertheless, demand from the downstream polyester sector has almost fully recovered, with the exploitation rate of the polyester and textile sectors accounting for about 91% and 86% of total capacity in China respectively.

On the other hand, the fundamentals of the purified terephthalic acid related market will remain strong this week given limited supply given large planned or unanticipated production reductions or closure of systems at the same time. end of March and in April. Meanwhile, many uncertainties remain in the PX and PTA markets, depending on the commissioning status of Hengli's new PX plant, in addition to the important settlement that failed last Friday for PX April ACP.

–Regina Sher, [email protected]

– Posted by Norazlina Juma at, [email protected]