Singapore — Asian petrochemicals, particularly in the polymers sector, will continue to be hit by high container freight rates as well as tight supplies in the week starting Dec. 28.
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Register NowMeanwhile, demand for all petrochemicals has slowed down due to the year-end holiday lull. Market participants continued to eye startups of new petrochemical plants planned in 2021 in a bid to assess the market's supply condition for the near-term.
Polyethylene
**Asia's low density polyethylene markers were stable to weak due to soft demand on the back of the year-end lull. Although prices had fallen in Southeast Asia, they remained at five-year highs, according to S&P Global Platts data.
**US supply was lower and no cargoes were headed to Asia due to high ocean container freight.
**The issue of container shortages and high freight rates, which has been impacting polymer markets, is expected to persist till early-February 2021, according to market players.
Polypropylene
**Physical spot discussions are expected to be scarce with most Asian polypropylene sellers and buyers adopting a wait-and-see approach amid year-end holiday.
**Chinese PP demand slowed down as some downstream plants in Zhejiang province were shut for electricity control, while some in North China were shut for environmental pollution control, according to sources.
**Offers were likely to remain limited with high prices due to low stocks with many sellers.
Recycled polyethylene terephthalate
**Recycled PET supply is expected to remain tight in many Asian regions due to lack of feedstock bales supply amid the coronavirus pandemic.
**Physical international trades for Asian recycled polyethylene terephthalate are likely to remain scarce amid container shortages and year-end holiday season.
Ethylene
**The spot prices are expected to remain firm on the back of tight supply in the January arrivals, with local production outages and closed arbitrage from Europe and the US.
**Trade participants said the falling downstream ethylene derivatives prices may lead to bearish ethylene buying sentiment.
Methanol
**Trading activity in the Asian methanol market is expected to be thin as the year draws to a close, but prices are expected to be supported or even firm on the back of tight spot supply and production issues globally.
**Methanol inventory in China's eastern coast contracted 3.41% on the week at 1.02 million mt, showed data from market research firm Longzhong.
**Trade sources said natural gas supply in China has been diverted to heating, and domestic methanol production in the coming weeks could slow.
Propylene
**Chinese propylene market is poised to receive some support during the week as some last minute restocking ahead for New year lend support.
**Formosa Petrochemical has awarded its tender at $1,004/mt FOB Taiwan via fixed price tender that closed Dec. 24.
**Arbitrage opportunities were open for non-Asian buyers as the price gap between Asian and North-American products was more than $200/mt.
Purified Terephthalate acid
**Asian PTA fundamentals are expected to stay stable with long supply in China and tight supply in India, and relatively stable market in many other regions in the week starting on Dec. 28.
**Chinese trade participants are eyeing on the new startups in first-quarter 2021, holding a largely bearish view on the outlook.
Oxo-Alcohol
**China 2-ethyl hexanol import prices are likely to trend higher amid tight spot supply after the government in Shandong province, a major production region, ordered curbs on production and transportation of 2-EH in a bid to combat air pollution.
**CFR China 2-EH was assessed $70/mt higher week on week at $1,445/mt Dec. 24.
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ASIA: The week ahead in petrochemicals - S&P Global
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