Factbox: Unusual petchem cargo flows emerge as India extends lockdown

Singapore — Several petrochemical plants in India have been shut down after the government imposed a nationwide lockdown on March 24, which this week was extended to May 3 to fight the spread of the coronavirus.

This has led to exports of certain products which India normally does not export as inventories at domestic ports have built up.

However, some chemical plants will resume operations on or after April 20 in line with an easing of the restrictions.

Prices

**The CFR India PVC price sank $100 week on week to a record low of $660/mt on April 15 as the lockdown slashed PVC demand.

**Acrylonitrile CFR South Asia marker dived to a near four-year low of $970/mt on April 14. Acrylonitrile prices have tumbled since February on weak downstream demand as the spread of the coronavirus through Asia and the rest of the world hammered buying interest.

Infrastructure

**Tight methanol storage at Mumbai and Kandla continued to weigh on fundamentals in India. Non-sanctioned methanol for prompt spot arrival was heard at offered around $180/mt CFR India. Producers in Saudi Arabia were selling methanol in February at $280/mt CFR. Sources said there was some movement of methanol cargoes from the ports to pharmaceutical companies as these receivers were considered providers of essential goods and services.

**However, storage remained extremely tight for acetic acid cargoes, and while there were offers for Chinese-origin AA cargoes, few importers were, sources said.

**Storage tanks of toluene at the key west Indian ports, Mumbai and Kandla, hold around 40,000 mt, or twice their normal levels of about 20,000 mt, market sources said.

**PVC-related industries would unlikely be part of the government's plan to relax the current business restrictions.

**India's Thirumalai Chemicals aims to restart its phthalic anhydride plant at Ranipet, Tamil Nadu, on April 20. Thirumalai has a PA capacity of 145,000 mt/year at Ranipet.

**Main polystyrene producers, including Supreme Petrochem with a 272,000 mt/year capacity and LG Polymers India with an 80,000 mt/year capacity, will postpone their restarts due to the extended lockdown.

Trade flows

**In a rare occurrence, India is set to export 4,000-6,000 mt of toluene to China, with the cargoes loading in May, several sources said. India is usually net short toluene and a key market for Asian toluene.

**Asian PVC makers delayed to start their PVC business to next week from this week due to bearish demand. They may skip offering to India because of low demand. Some traders said India is even exporting PVC to clear high inventories.

**Asian PVC makers are moving their prompt April cargoes to China after large order cancellation. As a result, the CFR China price plunged $100/mt to an 11-month low of $620/mt Wednesday.

**Polyethylene trade was at a standstill due to the lockdown, sources said this week. Most of the buying was for essential services, and in very small lots, on a need only basis, sources said. Up to 90% of the plastic converters were closed, producers said.

**"We can expect scant buying from Indian acrylonitrile buyers, at least in the short run. In fact, we have seen many cargoes bound for South Asia being diverted to Southeast Asia, and that is depressing the price," a producer in Asia said.