The outlook for Asian petrochemicals markets looked mixed in the week ahead. Demand for many petrochemicals was seen thin ahead of the year-end lull, but the market would closely watch upstream crude oil prices for cues.
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Market participants were also closely watching for developments in the new omicron variant of the coronavirus as it could have an impact on the global economic recovery and affect demand-supply equations.
** Asian methanol prices are expected to be stable to firm as market participants await a clearer price direction in the week of Dec. 6.
** The sentiment in China could quickly turn bullish if natural gas supply in Iran's industrial sector is diverted to winter heating, in turn affecting methanol supply to China in January 2022, sources said.
** Meanwhile, snug supply in South Korea will likely see domestic and imported methanol prices supported in the short term.
** The short-term outlook for Asian toluene was weak on poor demand from blenders and end-product buyers, amid muted spot discussions.
** Traders were adopting a wait-and-see strategy and prices have been moving in sync with crude and upstream prices.
** China and India ex-tanks were seen holding steady-to-high inventories, further dampening requirements.
** The near-term outlook for Asian isomer-mixed xylenes remained weak amid ongoing sluggishness in demand -- both for gasoline blending and for paraxylene.
** Once the cloud of uncertainty over omicron fades, a strength in crude oil would be the only factor that may help the market cover recent losses, according to sources.
** The Asian monoethylene glycol outlook is expected to be bearish as demand was still seen weak.
** Market participants were closely watching for developments in the new omicron variant for any potential impact on global demand and supply conditions for MEG.
** The Asian polyethylene outlook is expected to be bearish in the week ahead. PE futures settled lower in the week to Dec 3 as the market digested the impact of the coal price falls after the Chinese government signaled more price regulations.
** Markets remained focused on reports about the omicron variant that is raising fears of a new surge in infections that could derail economic recovery outlooks.
** Asian recycled polyethylene outlook was seen weak in the year-end lull.
** Traders said illegal waste trafficking was on the rise amid tightened waste import restrictions imposed by many countries and the high cost of waste management infrastructure.
** Illegal repackaging of prime resin as recycled resin also made some end-users hesitant, traders said, with sourcing and traceability of the recycled material being an issue.
** Asian PVC prices were seen stable-to-bearish in the week of Dec. 6 ahead of January 2022 offers by key producers.
** Some market sources said fresh offers for January 2022 would likely come down a further $30-$50/mt, while others said the drop could be more than $100/mt. Offers for December were slashed by $150/mt from November.