Rising inventories across Asia, weak demand from downstream products (polypropylene, acrylonitrile and acrylic acid) and the economic slowdown in the US and Europe is expected to dent the market for Asian propylene and its derivatives. Some China-based manufacturers of acrylic acid faced around one-fifth of decline in YOY exports for August. Asia's propylene price benchmarks stood at US$1,070/mt FOB Korea and US$1,100/mt CFR China on Thursday. FOB Korea propylene cargoes witnessed selling bids starting from $1,100/mt and buying interest pegged at US$1,000/mt. Since Friday, the buy-sell price difference inflated to around US$100/mt.
While Japanese and South Korean propylene inventories have been facing a glut capacity, many propylene derivative plants in China, India, Indonesia, Japan, the Philippines and South Korea have curtailed their operating rates for months. Also, the demand for propylene oxide from China has not risen even after lifting of Government regulations which were imposed during Olympics.
04-Oct-08 
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