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Asia petrochemicals outlook, w/c Feb 22


Global Coal Alert (Уголь)

Asia petrochemicals outlook, w/c Feb 22

New York — Global spot supply shortage owning to adverse weather in the US and strong replenishing needs after Lunar New Year holidays continued to support the olefins market. The sentiment on other aromatics products, such as paraxylene and toluene, also remained bullish on tight supply while a few buyers have resumed post holiday restocking.

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** The sentiment is likely to stay firm as tight supply continues to underpin strength in Asian paraxylene along with upstream oil price movements.

** Market participants will look to the March Asia Contract Price negotiations after the ACP had its first settlement in 16 months for February.


** The firm outlook in the Asian toluene market would likely continue to be led by strengths in China as some local traders had sought materials for replenishment while businesses resume post holidays. The FOB Korea toluene physical climbed to as high as $670/mt on Feb. 18, S&P Global Platts data showed.

** A recovery in toluene demand within the northeast Asia region could potentially dent arbitrage volumes to the US from Asia.


** The market outlook for Asian benzene remains bullish in the new week as a disruption in styrene feedstock supply globally raised prices and lent support for benzene.

** The Asia benzene markers closed the week ended Feb. 20 above $800s/mt.

** A force majeure was declared on propylene oxide/styrene monomer (PO/SM) production at the Maasvlakte LyondellBassell/Covestro facility in the week ended Feb. 20, as severe winter weather in Texas put more than 1.5 million mt/year of styrene capacity out of operation.


** Fundamentals in the Asian methanol market are mixed and prices would seek direction in the new week.

** Sentiment in China could soften on expectations of fresh Iranian methanol supply in March and higher local methanol production as natural gas cuts in China's southwest ease with the onset of warmer weather.

** Fundamentals in South Korea and India are expected to remain bullish from healthy demand and tight supply. South Korean buyers will likely be keeping a close watch on Indian methanol prices in the week as the two compete in the subcontinent market for cargoes.


** The China propylene market is likely to move up in the week as disruption in deepsea shipments from the US, owing to adverse weather, and restocking needs after Lunar New Year holidays lend support.

** US supply is disrupted by the winter storm, leading to hikes in oil, feedstock and polymer prices, which in turn has pushed up propylene prices in Asia.

** CFR China crossed the $1,000/mt mark to hit $1,005/mt Feb. 19.


** Asian ethylene spot prices would likely find support from strong downstream polyethylene, styrene, and monoethylene glycol markets, and higher buying indications are expected.

** The narrowed ethylene-naphtha spread is expected to pressure the margins of steam crackers, which may lead to considerations of adjusting cracker operating rates down.


** Asian monoethylene glycol prices spiked in the previous week on snug supply, particularly on US supplies to China, amid the severe cold snap in the former.

** The US was China's sixth biggest exporter with 737,000 mt imported in 2020, according to recently released customs statistics.

** Market participants were worried that the cold snap could affect US MEG exports to China.


** The market sentiment on Asian polyethylene remained upbeat given the emergence of stronger replenishing needs.

** Asia polyethylene prices increased on snug supply. End-converters were restocking for March -- a typically peak manufacturing period.

** Prices was also pushed up by snug supply in the US.

Recycled polyethylene

** Asian recycled high density polyethylene clear film prices continued to rise due to higher buying ideas and snug supply.

** In Southeast Asia, some buyers said domestic prices were higher than for imports, and hence cheaper imports would attract demand. However, supply was tight.

** The dollar weakening against most Asian currencies also lent support to import demand, market sources said.


** China's 2-ethyl hexanol import prices look poised to receive strong support in the week amid ongoing supply shortage and strong downstream margins, after the government in Shandong province ordered curbs on production and transportation of 2-EH in a bid to combat air pollution.

** CFR China 2-EH was assessed $130/mt higher week on week at $1,550/mt Feb. 19, the highest since it reached $1,555/mt on March 14, 2013.

** Many workers in China did not travel to their hometowns during the holidays and instead remained in the cities they work, in response to government advisory. As such, many downstream producers that are using 2-EH as feedstock are operating their plants at higher rates. This has reduced supply and pushed up the price for 2-EH feedstock.


** The acrylonitrile market is likely to trend higher in the week as global shortage woes lend support.

** In South Asia, acrylonitrile prices rose $30/mt at $1,950/mt on Feb. 16 -- hitting a new 20-month high.

** Spot supplies were tight globally following force majeures announced by Cornerstone in the US and INEOS in Europe.

** India was more reliant on the US and Europe for its acrylonitrile requirement, and the South Asian country is now competing with buyers in other parts of Asia for the product.