News Code : 44125

Asian petrochemical sentiments are expected to remain bearish amid uncertainty over crude oil and coronavirus pandemic globally.

Petrotahlil - Weaker demand of final products from Western countries will likely to pressure Asian petrochemical on polymer sector.

Paraxylenes (PX):

Weakness in Asian paraxylene is expected to persist and continue tracking upstream crude and naphtha markets amid falling prices across aromatics market. Fears triggered by the coronavirus pandemic and concerns over the global economy continue to weigh on PX prices amid limited support, rendering it difficult for a firm rebound in the near-term on the back of weak fundamentals. Larger price fall in naphtha outstripped that of PX earlier leading to a wide PX-naphtha spread that was expected to be unsustainable considering its weak supply-demand. The widening spread eased to end the week at $280.30/mt Friday, down $22/mt on the week.

PTA:

Asian purified terephthalic acid prices are likely to remain under pressure amid supply glut in China, as well as volatile upstream markets. In China, the PTA stocks hit around 3.2 million mt last week, more than double of the typical inventory level seen, a source said. The overall run rate of Chinese PTA has fallen six percentage points week on week to around 70% of total capacity Friday. Some other northeast Asia producers continue to stand firm on offers with lower run rate, yet are facing the challenges of weak overseas demand, especially in China, India, and Europe amid coronavirus outbreak.

MEG:

Asian monoethylene glycol prices rebounded on the back of higher energy futures. The market was in contango, with May parcels discussed at a slightly higher price than prompt deliveries.

China raised export tax rebates on about 1,500 products by 9%-13%, the country's State Administration of Taxation announced. The increased tax rebates has come into effect and apply to a wide range of products, including MEG.

Ethylene:

Asian ethylene prices is expected to be pressured by weak demand in polymer downstream sector, amid weak final product demand in western countries. Supply from South Korea is expected to be shorten due to healthier domestic demand after Lotte Chem incident. In Southeast Asia, supplies are expected to be ample amid handful of deepsea cargo heading to Asia, which will pressure the spot price further.

Polyethylene (PE):

Asian PE prices were down due to weak demand stemming from decreased downstream operations due to the coronavirus outbreak. Poor sales and high inventories prompted domestic Indian producers to announce price protection until April. Most customers continue to adopt a wait-and-see approach, on the back of expectations price would fall for all polymer grades. Some small to medium sized converters were waiting for more economic stimulus to resume plastic processing operations, but the medium to large scale companies continue to push for higher operating rates. Some export oriented plastic processers were seeing lower purchase orders globally.

Propylene:

The propylene market is likely to trend lower this week as growing spot availability and general bearish market sentiments is expected to add pressure. Chinese buyers were showing strong resistance towards spot imports procurement amid the recent crude oil rout and they were expecting price to move even lower as Tianjin Bohai is expected to restart their PDH plant later this week. On Korean marker, sellers were lowering their offers to entice buying due to growing spot availability after SK Advanced were running their PDH plant at full last Thursday. Sources said that the price for CFR China will hit below $700/mt within this week given bearish outlook on downstream polypropylene.

Polypropylene(PP):

Market sentiment is expected to remain bearish for Asian Polypropylene this week. Asian buyers generally believe there are still rooms for PP prices to fall further after upstream crude oil fell 12% last week, while the PP CFR Fareast marker dropped only 3% week on week to $820/mt last Friday. The total inventories at China's Sinopec and CNPC's warehouse were heard at 1.28 million mt last week, higher than the typical level of 1 million mt.

Methanol:

Fundamentals for China could remain weak for April and May as the coronavirus pandemic saps global consumer demand.

Chinese ex-tank prices reversed gains from last Friday, and were trading Yuan 50/mt lower in Monday morning trade.

Inventory at China's east coast is expected to swell with the arrival of new cargoes amid slow downstream demand, trade sources said. The outlook is also expected to be bearish for Southeast Asia. Malaysia's decision last week to ban foreign visitors from coming in and residents from going out of the country for two weeks until March 31, dampened demand and hindered local deliveries for two weeks, said local sources. Some distributors in the country were heard to have postponed taking their nominated term cargoes. CFR China methanol prices on Friday were assessed at $191/mt, unchanged from Thursday, while CFR Southeast Asian methanol prices slipped $1/mt over the same period to $229/mt.

Toluene:

All eyes are turning to China for fundamental support for the Asian toluene market, underpinned by the steep rebound in their domestic market which could suggest on the gradual return of consumption in the country. However, outlook for other countries within Asia remained dim, as end users were still grappling with uncertainty to their individual local requirements for the manufacture of downstream products. FOB Korea toluene marker plunged to a historic low of $327.50/mt in the previous week before rebounding to $333/mt on last Friday's Asian close.

Follow us on twitter @petrotahlil 

END 

Send Comment

view latest news
More News