Asia Petrochemicals: Key market indicators this week

Singapore — The weakening economic outlook in parts of Asia led by the COVID-19 emergency in India has led to a slew of bearish, or mixed price outlooks across petrochemical products in the week of April 26-30.

South Asian demand promises weakness despite the usual demand surges due to Ramadan and the Eid al-Fitr festival.

ETHYLENE

**Asian ethylene spot discussions are expected to be thin in the coming week, ahead of the five-day national holiday in China, while most May arrival demands were fulfilled and June arrival discussions have yet to start.

**China's domestic price likely to firm amid tight supply amid cracker turnarounds.

BUTADIENE

**Asian butadiene would likely remain mixed this week. Market participants decided to take a wait-and-see stance. Butadiene plant turnaround season tightened spot supplies, while several new butadiene plants are due to start up in May.

POLYETHYLENE

**Asian polyethylene prices are likely to extend their downtrend as southeast Asian prices continue to fall on the back of weak demand during Ramadan, traders said. China prices fell due to a seasonal lull starting from May.

RECYCLED PE

**Asian recycled HDPE outlook is weak amid thin trade 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.

PVC

**Asian PVC market will likely turn bearish in the coming week as buyers' sentiment has been weakening amid record-high prices. India's buying appetite for PVC has been diminishing due to the partial lockdowns amid a fresh COVID-19 outbreak.

METHANOL

**Fundamentals in the Asian methanol market are likely to be mixed in the week ending April 30. Indian methanol demand is expected to be weak as the country grapples with a virulent wave of COVID-19 cases, while the Chinese methanol market is likely to trade higher as vessel delays exacerbate limited availability of spot cargoes and low inventory at China's coastal areas.

MTBE

**MTBE blending demand to focus on delivery to Malaysia, continues for late April and late May cargo.

**MTBE prices follow gasoline and crude oil values, but some market players still consider FOB Straits MTBE to be overpriced.

**South China MTBE market oversupplied leading to low domestic values and low bids.

TOLUENE

**Asian toluene supply-demand balance steady from the previous week, as pockets of demand were streaming from gasoline-blending activity, or stockpiling from Northeast Asia, while toluene disproportionation unchanged.

**Tightness in some blendstocks had given opportunity for toluene to grab some trader interest. FOB Korea toluene physical was flat at $715/mt on April 23, versus FOB Singapore MTBE at $726/mt.

ISOMER-MX

**Asian MX remains supported by tight supply due to turnarounds at key exporting country Japan, with the spread to naphtha widening to more than $200/mt at the end of last week ended April 23.

**Demand has been mainly from China-based PX producers, with MX inventory in East China dropping to its lowest since late April 2020, currently at about 67,000-68,000 mt, S&P Global Platts data showed.

**Gasoline demand in China appears sluggish, but traders said MX tightness is partially the result of the increase in gasoline production by refiners, leading to lower aromatics production.

PARAXYLENE

**Tight regional PX supply continues to provide support and expected to remain in the quarter amid scheduled turnarounds at Asian plants, sources said.

**Demand, however, was seen as uncertain. While spot demand would likely pick up following the PTA plant maintenance season, sources continue to raise concerns that weak Chinese PTA margins may potentially result in overall lower operating rates and therefore softening PX demand, sources added.

**This week, market participants are keeping a close watch on the May PX Asia Contract Price negotiations. The April PX ACP failed to settle, while the last major settlement for PX ACP was at $870/mt CFR Asia for the March PX ACP.

MEG

**Outlook for the Asian monoethylene glycol prices is bearish due to weak demand ahead of the seasonal lull that begins in May, market sources said.

Chinese port inventories had declined to 543,000 mt in the week April 26-30, down by around 30,000 mt week on week, according to market observers.