Asia petrochemicals: Key market indicators for May 30-June 3

Asian olefins are mostly expected to remain under pressure during May 30-June 3 from weakening demand and margins from key downstream derivatives such as polyethylene and polypropylene.

Butadiene will remain a bright spot for olefins commodities amid a recent surge in prices following production cuts.

Ethylene

** Asian ethylene markets are likely to remain under pressure from weak derivative margins, such as polyethylene and monoethylene glycol, while upcoming turnarounds in key downstream sectors in June would also curtail buying interest for spot ethylene.

** Ethylene production is also expected to decrease as ethylene producers are expected to cut operating rates in June from thin margins and falling demand.

Propylene

** Asian propylene market is expected to remain weighed down by bearish sentiments as weaker downstream polypropylene prices continue to exert downward price pressure and buying appetite on propylene.

** Propylene CFR China marker hit $1,010/mt CFR China May 27, down $40/mt from May 21. However, some pockets of optimism remained with some propylene producers expecting improved propylene demand after COVID-19 restriction are lifted in Shanghai.

Butadiene

** Asian butadiene market is set to remain supported by tightened spot supply, a result of lower production after steam cracker operations were reduced, notably in South Korea and Japan.

** Chinese suppliers ARE expected to continue eyeing export opportunities to South Korea on favorable netbacks.

Polyethylene

** Outlook for Asian polyethylene remainED bearish with COVID-19 restrictions in China dampening demand and prices across Asia.

** Chinese traders remained cautious on stocking up on polyethylene despite promises of a lift in COVID-19 restrictions in Shanghai, as the restrictions remained in place in several other cities in China.