The strong demand from the makers of propylene derivatives like acrylic acid, propylene oxide and others led to the Asian propylene market remaining firm on Monday and edged up US$5-10/mt relative to the Friday price. As opposed to a tame polypropylene trade, the propylene prices stood at US$1,535/mt FOB Korea and US$1,590/mt CFR China.
As far as China is concerned, the deteriorating and inconsistent electricity supplies have forced the acrylic acid producers to maximize their plant production while supplied with power. This has led to a surge in propylene demand in China as the buyers are ready to pay more to purchase imported cargoes than an average polypropylene producer. Besides, state-owned Sinopec and PetroChina (which are the leading PP makers in China) are given a priority for power supply over the producers of the propylene derivatives.
In South Korea, the curtailment in propylene production and a delay in shutdown of the propylene derivatives maker have led to a stronger propylene demand. Samsung Total Petrochemicals is running its new Daesan-based 200,000 mtpa propylene plant at a rate of 60% due to a lack of raw material supply, thereby making it difficult to sell spot cargoes in the short-term. Also, acrylonitrile producer and acrylic fiber producer, Taekwang Industrial delayed the shut down of its plants to January 2009 thereby will absorb the 20,000 mt of propylene from Ulsan for October and November loading. However, the firm will continue operating its 250,000 mtpa propylene plant at full capacity while shutting down its derivatives plants in January next year.
02-Sep-08 
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