Asia Petrochemicals: Key indicators Aug 16-20

The recent increase in COVID-19 cases in China could continue to hamper logistics for petrochemical flows during the week of Aug. 16-20, market sources said, while the high cost for container shipping remains an issue for polymer shipments.

Propylene

**The CFR China marker is likely to stay stable this week as Chinese buyers have not exhibited interest in import procurement. Buying interest was reportedly weak as some ports along the Yangtze River and some eastern Chinese ports had suspended the berthing of foreign ships, while truck mobility to COVID-19 affected areas was restricted.

Acrylonitrile

**The Asian acrylonitrile market is under pressure this week after Zhejiang Petrochemical managed to produce on-specification acrylonitrile from its second 260,000 mt/year ACN plant at Zhoushan in eastern China's Zhejiang province on Aug. 12. Additional capacity is expected to exert pressure on spot prices.

PE

**Asian polyethylene prices might continue to fall in China due to weak demand resulting from the worsening COVID-19 situation as well as river port discharge issues. Chinese buyers stayed in a wait-and-watch mode in terms of spot discussions, noting the downtrend.

MEG

**Asian monoethylene glycol might continue to fall this week amid lower price discussions due to a slump in energy values and an increase in supply.

**China's Gulei Refining & Chemical plans to start its new 700,000 mt/year MEG unit in Zhangzhou, Fujian by the end of August after the successful start of its new naphtha-fed ethylene cracker with an 800,000 mt/year capacity, multiple sources said.

Recycled PE

**Sentiment in the Asian recycled polyethylene market might remain bullish this week on higher logistic costs. Freight for exports skyrocketed to $30,000 per 40 feet container from Asia to the US, making imports to other regions unaffordable, traders said. Manufacturers said they had cancelled their orders, or choose not to deliver goods due to negative margins.

Isomer-MX

**Gasoline-related MX demand remains weak in key China market.

**The spread between paraxylene and MX has been narrowing and should the trend continue, could reduce demand for MX into paraxylene production. While PX prices weakened in the week ended Aug. 13, MX prices were supported by reports of production issues at a producer in Northeast Asia.

MTBE

**FOB Singapore MTBE price is expected to trend down this week amid rising MTBE supply and lackluster demand in the wake of the outbreak of the COVID-19 delta variant in Asia.

**Taiwan's Formosa Petrochemical Corp. was heard to have concluded its recent sell tender for 10,000 mt of MTBE loading over H2 September at around low double-digit discount to Mean of Platts Singapore MTBE assessments, lower than previous tender results.

**Malaysia's Pengerang Refining and Petrochemical, or PRefChem, has delayed the restart of its new 750,000 mt/year MTBE plant at the RAPID refinery. The company was looking to restart the plant in August.