Asian aromatics were a mixed bag last week, as methanol and butadiene prices were bolstered by tight supply while paraxylene, ethylene and propylene price movements were capped by healthy supplies. Upstream, feedstock naphtha costs rose $18.125/mt CFR Japan, over the week to $694.375/mt. This week, supply conditions will continue to dictate price movements.
AROMATICS
Asian paraxylene prices ended the week lower as supply for H2 June cargoes were “quite long” amid turnarounds in the downstream PTA market. Due to better netbacks on spot cargoes for June, end-users were also heard to have lowered operating rates and offered their term PX cargoes directly or indirectly to the spot market, which offset the tightness caused by the delay in Middle Eastern arrivals. Ample supplies are likely to continue to underpin trade activity this week, limiting any possibility of a significant price uptick.
Asian benzene prices rose last week, buoyed by persistent H2 June demand for both FOB Korea and CFR China cargo. Bullish sentiment should remain this week as market participants said demand was picking up due to the restart of downstream plants after the completion of scheduled maintenance. In addition, interest for June-loading cargoes was supportive of prices especially with the Asia-US arbitrage window open. The open arbitrage window, together with low imports, firm toluene prices and recent gains in crude oil prices could lift US benzene prices this week.
OLEFINS
Asian Ethylene prices were stable last week and will possibly remain so this week as some reluctance to trade on a fixed price basis emerged given the uncertain demand-supply conditions in the near term. Supplies were heard to be sufficient although the price spread between Europe and Asia was narrowing, standing at less than $80/mt, and the arbitrage window seen closing. On the demand side, demand was healthy as margins for downstream derivatives remained firm.
Asian Propylene prices are also likely to remain rangebound this week, after rising slightly last week, from stronger demand in the China market. This week, however, participants expect spot supply to increase after South Korean producers SK Advance’s 600,000 mt/year capacity propylene dehydration plant (PDH) and Hyosung’s 500,000 mt/year capacity PDH plant both restarted last week. Consequently, this will cap price increases going forward.
Asian Butadiene prices rose last week on the back of tight supply, and will continue to be supported this week as availability is thin. This is especially so in Japan, where a cargo shortfall had allowed a temporary arbitrage for cheaper Chinese cargoes to Japan.
METHANOL, MTBE
Asian Methanol prices may continue to see support in the near term amid low domestic China port inventories as a result of lower inland Chinese cargoes arriving at the coast, and decreasing imports from the Middle East. However, as Middle East plants return from maintenance and begin ramping up production, supply to China is expected to ease.
Asian MTBE prices soared last week on the back of the higher energy complex and gasoline prices, and will continue to take their cue from the energy complex this week too. Fundamentally, supply is heard to be ample for June cargoes, thereby putting a cap on tradeable premiums to the FOB Singapore marker.
–Desiree Quah, desiree.quah@spglobal.com
–Edited by Norazlina Juma’at, norazlina.jumaat@spglobal.com
Related Topics
-Russia Eyes Petrochemicals As Answer To Crude Oil Reliance – On a sprawling construction site in Western Siberia, about 20,000 workers are busy building what will be one of the world’s five biggest petrochemical plants – On a sprawling construction site in Western Siberia, about 20,000 workers are busy building what will be one of the world’s five biggest petrochemical plants, part of a play by Russia to capture more of the value from the oil it produces – Russia Petrochemicals Crude Oil Reliance
-Asia petrochemicals outlook, w/c May 14 -Asian petrochemical prices are seen likely to continue to trend higher this week amid support from bullish crude futures – Asia petrochemicals outlook
-Asia petrochemicals outlook, w/c May 7 – Petrochemical market participants will be keeping a close eye on developments upstream this week, particularly the fate of the US-Iran nuclear agreement and its impact on crude oil, which in turn will influence aromatics and MTBE markets – Asia petrochemicals outlook
-EMEA petrochemicals outlook, w/c Apr 23 – The European ethylene market looks stable as the recent length has cleared following a spate of exports to Asia – EMEA petrochemicals outlook
-Americas petrochemicals outlook: w/c Apr 16 – Spot ethylene has been on the rise, 0.50 cent/lb higher than the record lows seen April 9 after prompt-month was heard offered at 14 cents/lb MtB Nova – Americas petrochemicals outlook
-Motiva considers ethylene, aromatics projects in US – Motiva Enterprises signed $8bn-10bn worth of memoranda of understanding (MoUs) covering process technologies for possible ethylene and aromatics units in the US – Motiva ethylene aromatics projects USA
-US spot ethylene falls to 16-year low amid tariff concerns – US spot ethylene traded at a 16-year low on Friday amid long supply and concerns about proposed Chinese tariffs on chemicals – USA spot ethylene chemicals
-The initial price for MEG in Europe for April deliveries fell by EUR20 per tonne – The initial contract price of monoethylene glycol (MEG) in Europe for April deliveries was agreed at the level of EUR965 per tonne, which is EUR20 per ton lower than the March contract prices – Price MEG Europe April
-China’s MEG up in anticipations of better supply-demand for Q2 – China’s MEG market has remained rangebound for around two weeks, and domestic spot prices shivered around 7,000yuan/mt – China MEG prices market
-Prices MEG in the US may fall in April – It is expected that prices of monoethylene glycol (MEG) in the US will decline in April due to a weakening of demand between peak seasons – Prices MEG USA April
-AFPM ’18: EQUATE’s US MEG plant begins construction phase – CEO – AFPM 2018 EQUATE USA MEG
-Sabic reduced the April price of MEG by USD55 per tonne – Sabic, the largest Saudi petrochemical company, has lowered the contract price of monoethylene glycol (MEG) to supply material to the Asian market in April at USD55 per tonne compared to the March price level – Sabic April price MEG
-MEGlobal lowered the April contract price of MEG in Asia by USD80 per tonne – MEGlobal, the world leader in the production of monoethylene glycol (MEG) and diethylene glycol (DG), set the April contract price for MEG for Asia at USD1,100 per tonne – MEGlobal April contract price MEG Asia4
-China polyester to drive MEG, but oversupply fears – China polyester MEG oversupply – Robust demand from polyester production in China is expected to drive the Asian monoethylene glycol (MEG) market in the first half of 2018
