Sentiment in the Asian petrochemical market is set to be mixed this week after a fall in upstream crude oil futures and thin trading activity last week in the to end of Ramadan holidays in the Middle East and Southeast Asia. S&P Global Platts did not publish assessments Monday due to the public holiday in Singapore.
August ICE Brent futures fell US$1.83/b week on week to US$45.49/b at 4:30 pm Singapore time (0830 GMT) last Friday. China's Ministry of Commerce announced the same day it had launched an antidumping investigation into styrene monomer imports from South Korea, Taiwan and the US following a recent petition filed by domestic SM producers. The probe will examine imports over January 1-December 31 last year and is expected to be concluded by June 23 next year, which could be extended to December 23, 2018, under special circumstances, the ministry said in a statement.
Asian aromatics markets came under pressure last week amid the fall in crude oil futures. The FOB Korea benzene marker was assessed down US$14.50/mt week on week at US$735/mt last Friday. The FOB Korea toluene marker dived US$35/mt over the same period to US$574/mt, the lowest level since August 29 last year when it was assessed at U$567.50/mt, under pressure from weak buying interest due to a slim toluene disproportionation margin.
The CFR China SM marker fell US$20.50/mt week on week to be assessed at US$1,108.50/mt last Friday, with the styrene production margin calculated at plus US$82.50/mt, narrowing from US$94.10/mt a week earlier. CFR Taiwan/China paraxylene price dived US$28.33/mt week on week to be assessed at US$768.67/mt last Friday, while the CFR Taiwan isomer-grade mixed xylene price fell US$17/mt over the same period to US$637.50/mt.
The price declines came despite aromatics inventories in key buyer market China seen lower for several products. In East China, the toluene inventory level fell 6.26% week on week to 75,000 mt, mixed xylene inventory fell 9.09% to 50,000 mt and SM inventory fell 2.74% to 71,000 mt, Platts data showed. On the other hand, benzene inventory in China rose 22,500 mt week on week to 82,000 mt.
Asian olefins markets shrugged off falling crude futures last week to firm amid tight supply concerns. In South Korea, olefins supplies were seen to have turned tight as Korea Petrochemical Industry Co., or KPIC, continued to struggle to achieve on-spec production at its sole naphtha-fed steam cracker at Onsan. The steam cracker is able to produce 800,000 m tpa of ethylene and 500,000 m tpa of propylene.
In Japan, Mitsui Chemicals shut its naphtha-fed steam cracker at Chiba June 20 for annual maintenance that is slated to take until August 2. It is able to produce 600,000 m tpa of ethylene and 331,000 m tpa of propylene. In Southeast Asia, Indonesian Chandra Asri Petrochemical's sole naphtha-fed steam cracker was operating at about 90% of capacity following a small fire on June 10, and is expected to run at 90% for a month. It has the design capacity to produce 860,000 m tpa of ethylene, 430,000 m tpa of propylene, 220,000 m tpa of mixed C4 and 280,000 m tpa of pygas. The CFR Northeast Asia ethylene price rose US$9/mt week on week to be assessed at US$960/mt last Friday, while the FOB Korea propylene price rose US$6/mt to US$831/mt over the same period. Meanwhile, the CFR China butadiene price spiked US$90/mt week on week to US$965/mt last Friday.
Asian polymers markets were mostly bearish last week. Film-grade high density polyethylene fell US$5/mt week on week to be assessed at US$1,085/mt CFR Far East Asia last Wednesday, with HDPE demand typically lower in June as peak manufacturing season has ended. In China, HDPE inventories at ports in east and south China were slowly being drawn down, although they were still considered relatively high at around 400,000 mt, according to market sources. The rough estimate of PE inventories at east Chinese ports was heard at around 700,000-750,000 mt. The Far East Asia polypropylene price edged down US$5/mt week on week to be assessed at US$965/mt Wednesday, also amid low demand season. The CFR China PVC price fell US$5/mt week on week to be assessed at US$865/mt last Wednesday. Fresh July offers kicked off in the range of US$860-870/mt CFR China, unchanged from the June settlement price. Some end-users were accepting the offer level, while most were opting to take a wait-and-see approach.