Petrochemicals: Mar 19-23: Ethylene up further on supply shortage

26 March, 2018

The FOB Korea benzene market increased thanks to high crude prices. Supply/demand however, was seen to be slack and this limited the magnitude of the rise. Paraxylene prices also rose along with firm crude price but the upside was capped by views that new facilities in the Middle East and Southeast Asia would start up in the near future.

The CFR Northeast Asia ethylene market strengthened on the back of supply tightness. Softening derivative prices, however, curtailed the rise. For April delivery, deals were reportedly done at $1,350-1,360/mt. On an FOB Korea basis, the market moved above CFR prices. In the middle of the week, a cargo loading Korea in April was apparently traded at $1,400/mt. With naphtha crackers in the region undergoing maintenance successively and some naphtha crackers experiencing troubles, the sense of supply shortage heightened and traders rushed to buy cargoes on an FOB basis.

The Asia propylene market softened. In Northeast Asia, amid weakness in China domestic prices, buying interest from end-users for imported cargoes receded. In the China domestic market, declining derivative polypropylene prices chilled sentiment. On an FOB Korea basis, activity was subdued. In Southeast Asia, a Singapore make sold two 4,000mt loading April.

The Asia butadiene market was relatively unchanged. In Northeast Asia, ideas between buyers and sellers were far apart, making it difficult for deals to be done. Sellers were unwilling to lower offers due to tight supply. On the other hand, buyers showed no hurry to engage in trade since synthetic rubber prices were weak. In Southeast Asia, two makers conducted sell tenders for April loading.


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