Petrochemicals: Jul 9-13: FOB Korea ethylene prices surge

16 July, 2018

The Northeast Asia benzene market was relatively unchanged but the spread with benchmark feedstock crude and naphtha prices widened slightly. The market was supported by low inventories in China and Sinopec raising ex-works prices.


The CFR Northeast Asia ethylene market increased due to thin supply arising from maintenance of naphtha crackers and troubles of production facilities in Japan. Under this situation, a cargo was sold into China to a styrene monomer (SM) maker at $1,400/mt. On an FOB Korea basis, a deal for August loading was concluded at $1,400/mt as well, an indication that traders were showing keen interest in securing cargoes.


The Asia propylene market strengthened. In Northeast Asia, market sentiment was strong in view of rising China domestic prices and limited availability of imported cargoes. On an FOB Korea basis, S-Oil’s new olefin facility started up and on-spec propylene was produced but was shut down again in the second half of the week due to glitches. In Southeast Asia, buying interest was seen from end-users but talks were subdued as sellers were not seen.


The Asia butadiene market moved up. In Northeast Asia, supply was tight while demand from Taiwan, Korea and Japan was firm. As a result, market sentiment strengthened. Chinese end-users, however, felt that prices were relatively high and were not keen to buy imported cargoes. Further, as domestic prices were relatively low, moves to export were seen. On an FOB Korea basis, an August cargo was traded at $1,700/mt. In Southeast Asia, PTTGC sold August loading via a tender.


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