Asia petrochemicals: Key market indicators for Aug 30-Sep 3

Persistent bottlenecks at ports in Asia and some maintenance-related plant closures are likely to hurt the supply of petrochemicals during the week of Aug. 30-Sept. 3, market sources said.

Methanol

** The Asian methanol market is expected to remain stable to firm in the week ending Sept. 3, even as the arbitrage from China to Europe is closed, sources said. The availability of September and October spot cargoes in Asia is expected to be tight, as sellers had earlier assigned swing volume to Europe and India.

** The European methanol market has been tightly supplied in recent weeks, due to maintenance works at some of Europe's biggest production sites, according to sources.

Propylene

** The CFR China marker is likely to receive more support in the current week, as South Korea's spot supply is expected to become strained following the planned closure of some crackers in the region, sources said.

** South Korea's GS Caltex has shut its new mixed-feed cracker at Yeosu from Aug. 27 to Sept. 6 for maintenance, a company source said Aug. 27. The new steam cracker, which was started around June 18, can produce 750,000 mt/year of ethylene and 410,000 mt/year of propylene.

** Besides GS Caltex, South Korea's LG Chem will shut its Daesan steam cracker for planned maintenance from Sept. 28 to Nov. 15, Platts reported earlier. The steam cracker can produce 1.2 million mt/year of ethylene and 600,000 mt/year of propylene.

PE

** Asian polyethylene prices were up on tight supply, traders said. The price uptrend could continue due to a lack of supply, particularly from Iran, sources said.

MEG

** Operating rates at Asian monoethylene glycol plants were currently heard at around 60%-70%, traders said. The sentiment among traders was mixed, on the back of low supply due to reduced operating rates, but higher overall production, as China's total MEG capacity in 2021 is expected to rise by up to 6 million mt/year, if all the new plants operate at 100% capacity, sources said.

Recycled PE

** Asian recycled HDPE film outlook was stable on thin trade, sources said. Recyclers in Southeast Asia were heard operating at low rates, due to COVID-19-led lockdown measures.

PP

** Polypropylene price in South Asia is likely to remain firm, because of higher offers from the Middle East, container unavailability and healthy demand from India and Pakistan. China's PP imports may remain weak, due to the stable-to-bearish sentiment amid weak demand and an expectation of higher supply from new startups.

PTA

** Market sentiment for the Asian purified terephthalic acid is likely to be stable to bearish in the week starting Aug. 30, because of lackluster polyester demand amid container shortage, expensive freight, and coronavirus-related concerns, sources said.

** Many trade participants, nevertheless, pointed in the direction of upstream oil and paraxylene for price movements, particularly for dollar-denominated PTA cargoes.

Recycled PET

** Southeast Asian polyethylene terephthalate recycling companies will continue facing challenges with the availability of raw materials, due to the low collecting and processing rate, as a result of the COVID-19 pandemic, sources said.

** Many manufacturers are still looking to shift more volumes for local sales, as exports are restricted by container shortage and higher freight costs, sources said.