Asia petrochemicals: Key market indicators this week

Singapore — The Asian petrochemical market is likely to be mixed in the April 19-23 week with certain markets likely to show bullish trends due to ongoing tight supply, while momentum is expected to thin for ethylene and MEG on waning buying interest.

ISOMER-MX

**Asia's Isomer-MX fundamentals are likely to stay firm this week amid tight supply due to maintenance season at key producer country Japan.

**Improving gasoline demand is also expected to support MX prices, while margins for paraxylene production remains poor with the PX-MX spread at $66.83/mt on April 16, CFR basis.

Styrene

**Asian styrene is likely rangebound this week on softening fundamentals, but firm feedstock benzene and ethylene.

**Chinese producers, whose plants are under maintenance, will restart this week, while new capacities are gradually able to supply spot shipments.

**The surge in styrene prices has faced negative feedback from downstream producers and polystyrene market participants will remain cautious if the uptrend persists, showing less interest to restock as margins thin.

Toluene

**The outlook for Asian toluene is expected to be mixed this week as demand support from the toluene disproportionation sector has been slow despite the extended bull-run in benzene.

**Opportunities for toluene in the gasoline-blending pool could re-emerge as MTBE prices have readjusted higher.

**FOB Singapore MTBE physical surged to $750/mt on April 16 significantly higher than FOB Korea toluene at $707/mt on April 16.

Methanol

**Fundamentals in the Chinese methanol market are expected to remain supported to bullish this week on tight supply amid healthy downstream demand. Weeks of de-stocking activity had depleted inventory in China's east coast.

**Indonesia's demand for China re-export cargoes is expected to wane in April as economic activity slows during Ramadan and in May due to Eid Al-Fitr festivities.

Ethylene

**Discussions in the Asian ethylene spot market is expected to thin this week due to sluggish import demand from Chinese buyers and tight cargo availability. The ample supply in domestic China leads to lesser buying interest and weakens buy indications.

**Market participants are monitoring the recovery of crackers in Taiwan and Thailand following unplanned shutdowns in the week of April 12-16.

Recycled PE

**Asian recycled HDPE is likely to trend lower amid thin demand due to a lack of recyclable material.

**A range of prices were heard, with the lower colored end applications as much as 50% cheaper than the transparent resin.

PE

**Asian polyethylene prices were stable to slightly lower in the week to April 14.

**Southeast Asian prices fell on the back of weak demand during Ramadan.

**Thailand's SCG has shut its 160,000 mt/year low density polyethylene unit at Map Ta Phut for maintenance until early May, a company source said.

MEG

**Asian monoethylene glycol prices are likely to trend lower this week amid thin discussions in the spot market. May traditionally a lull season for MEG.

**MEGlobal nominated its MEG Asia contract price for May arrival cargoes at $830/mt CFR Asia main ports, down $100/mt from April, while Shell nominated its MEG ACP at $850/mt CFR Asia for May, also down $100/mt on the month.

Propylene

**The CFR China marker is likely to receive firmer support this week as there is renewed buying interest for imports amid some unplanned shutdown in Northeast Asia.

**Northeast Asian supply is reportedly tight after Taiwan's Formosa Petrochemical Corp. shut its No.1 naphtha-fed steam cracker in Mailiao on April 10. The company plans to restart the cracker April 19.

**Another major Chinese PDH operator, Ningbo Kingfa, was heard to have shut its production unit on April 12 for 25 days due to a technical issue. The CFR China marker inched $15/mt higher week on week to $1,185/mt on April 16.

Acrylonitrile

**Asia's acrylonitrile market will continue to face downward price pressure as buyers put their spot purchases on hold ahead of the arrival of acrylonitrile from the US and Europe due to arrive in far east Asia by mid-June.

**Acrylonitrile supplies in the US and Europe have been tight since February due to the force majeures announced by Cornerstone and Ineos.