13 Aug, 2018
The FOB Korea benzene market was firm, reflecting movements in the China domestic market. In the CFR Northeast Asia paraxylene market, demand from traders covering short-positions was still seen but buying for September finished and the spread between September and October markets narrowed although a slight backwardation was still observed.
The CFR Northeast Asia ethylene market moved up with a deal done at $1,400-1,410/mt. A number of naphtha crackers in Korea, an exporting country, would under maintenance from mid-September and perceptions of tight supply heightened. Further, due to high methanol prices, sources reckoned that operating rates of methanol-to-olefin (MTO) units in China might fall, intensifying the tight supply situation.
The Asia propylene market strengthened. In Northeast Asia, amid perceptions of supply tightness, sellers adopted a bullish stance and showed no hurry to sell. On the other hand, although end-users considered buying imported cargoes, they were discouraged by high prices compared to domestic cargoes. Ideas between buyers and sellers were far apart and talks were stymied. But as availability was extremely thin, market sentiment was strong. On an FOB basis, Taiwan’s Formosa Petrochemical Corporation conducted a sell tender for 5,000mt loading Aug 16-Sep 15.
The Asia butadiene market was relatively unchanged. With a wide gap between buying and selling ideas, it was difficult for deals to be done. Sellers held a bullish view and were in no rush to sell. On the other hand, end-users wanted to check movements in the derivative market and stayed on the sidelines. In Southeast Asia, one maker negotiated with traders to sell September loading but a deal was not reached.