This week in Asia, petrochemical prices look set to remain supported on upcoming peak manufacturing periods and plant maintenance. Demand for most products has been growing on rising feedstock prices, market sources said.
Of note in Southeast Asia, state-owned PetroVietnam and Thailand's Siam Cement Group expect to begin construction on their proposed $5.4-billion Long Son petrochemicals project in the fourth quarter.
Located in southern Vietnam, the Long Son petrochemicals complex will revolve around a 1 million mt/year steam cracker with a mixed feed to yield a total olefins capacity of up to 1.6 million mt/year depending on the feedstock mix.
In India, JBF Industries plans to start up its 1.25 million mt/year purified terephthalic acid plant in Mangalore sometime in October. The startup has been repeatedly delayed since commissioning was announced on March 31.
The startup of the JBF PTA plant is being closely watched by the paraxylene market, since most of neighboring ONGC Mangalore Petrochemicals Ltd.'s PX production, which is currently exported, will be diverted to supply the PTA plant.
AROMATICS
Asian benzene prices inched up last week, supported mainly by higher downstream styrene prices. Trading was subdued and discussions for September cargoes were thin because Chinese spot demand was weak. East China main port inventories rose 4,500 mt week on week to 128,300 mt.
Styrene monomer prices soared last week on tighter supplies. Stocks remain low in Asia, despite the recent recovery in inventories. Current stocks in East China of 50,200 mt are a sharp 32.2% lower than 74,000 mt a year earlier.
In addition, the arbitrage window into Asia has been shut on paper since August, with Europe providing a higher netback for exports from the US.
This could lead to a lower-than-expected volume of deep-sea cargoes being delivered into Asia in Q4 compared with previous years, industry sources said, providing an upside to prices.
OLEFINS
Ethylene markets continued its uptrend from last week, driven by limited spot supplies on the steam cracker turnaround season. The CFR Northeast ethylene price marker spiked $65/mt day on day last Friday to hit a five-month high while the CFR Southeast Asia market jumped $35/mt.
According to sources, some end-users in China emerged last week to procure spot cargoes, spurred by strong demand from downstream styrene monomer and positive production margins. The recent ethylene price increases in Asia were also beginning to attract Middle Eastern cargoes to Asia.
Butadiene prices in Asia hit their highest in more than three and a half months on firmer demand. Demand came from Chinese synthetic rubber producers, who were raising their production rates and from acrylonitrile-butadiene-styrene producers.
Part of the higher demand also came after most deep-sea cargoes arriving in August and September were sold off.
Asian propylene was stable week on week, despite plant shutdowns as demand was subdued. South Korea's Hyundai Oilbank plans to shut its residue fluid catalytic cracker in Daesan over August 23-September 22 for annual maintenance. It has the capacity to produce 350,000 mt/year of propylene.
Also, a fire at PetroChina Dalian Petrochemical's 1.4 million mt/year RFCC was estimated to put a damper on propylene supply. However, there has been no impact on prices as yet.
METHANOL AND MTBE
Asian MTBE prices rose $16 day on day on Friday and $23 on week to $675/mt FOB Singapore on gains in crude and gasoline.
Traders were heard to be seeking cargoes as market sentiment had turned bullish on higher crude prices, partly supported by one of the biggest draws in US crude inventories reported by the US Energy Information Administration last Wednesday and a slowdown in the US rig count.
Methanol prices surged last week with Chinese domestic prices rising Yuan 50 over the same period to Yuan 2,530/mt or $298/mt on an import parity basis. According to sources, prices were mostly driven by a boost in futures as the January methanol futures contract leaped Yuan 65 to Yuan 2,694/mt.
POLYMERS
Linear low-density polyethylene film prices fell last week due to a dampening in demand from environmental inspections.
Many plastic processors located in China were subject to inspections from the local environmental clean-up campaign for the release of volatile organic compounds and were required to reduce their emissions or shut down, sources said.
Traders were heard to be hoping for price compensations or rebates at the year-end, as demand was not as bullish as expected.
