Petrotahlil -Asia's petrochemical trade mostly slowed down ahead of the Dragon Boat Festival holiday in China on 25-27 June, with sentiment in key feedstock markets also weighed by the recent decline in crude oil prices.
Market players in China retreated from the market early in the week ahead of the holiday, with discussions in the butadiene (BD), benzene and styrene monomer (SM) markets remaining thin.
Sentiment was further weighed by the weakness in international crude markets. Oil prices extended losses seen in the previous session on Thursday amid worries over a resurgence in global coronavirus cases.
|$/bbl (As of 07:23 GMT)||Last Price||% Change||Net Change||Close||High||Low|
|Aug US WTI||37.71||-0.79%||-0.3||38.01||38.46||37.5|
In the Asian benzene market, trade slowed down and was in the low $400s/tonne FOB (free on board), mostly tracking the drop in oil prices.
While benzene inventories in China remain elevated, some players anticipate a tightening of supply for August as fewer deep-sea parcels are expected to land in NE (northeast) Asia.
In the first half of the week, offers of August spot lots to Taiwan were understood to be at $10/tonne and more against FOB Korea quotes, while buyers talked of prices in the mid-to-high single digit premium.
In the Asian butadiene market, discussions were subdued this week with market players exiting early in the week, while traders in Taiwan - also quite active in the BD market - were also away for the festival.
Spot discussions were distinctly thin this week, as market players in China are usually some of the most active spot buyers in the BD market.
BD spot prices were flat week-on-week at $330-400/tonne CFR (cost and freight) northeast Asia on 19 June, ICIS data showed.
Thin liquidity extended itself in Asia’s styrene monomer (SM) market for the second consecutive week ahead of the holidays, with more activity expected in early July amid conflicting market outlooks.
Run rates for domestic Chinese SM producers were high as well, given the high feedstock inventory pressures pushing some makers to still run despite the weak margins.
Sellers kept their offers mostly stable, especially for August parcels as upstream prices remained firm and margins remained in negative territory.
In ethyl acetate (etac) markets in Asia, there was limited export business materialising in the shortened trading week.
Selling indications for July etac cargoes were mostly maintained, with some producers raising their asking levels amid increasingly snug inventory on hand, hovering close to $700/tonne FOB China.
In related butyl acetate markets (butac), market sentiment is poised for tailwinds on the back of hopes of improving demand as countries in southeast Asia ease coronavirus lockdown restrictions.
In the Asian titanium dioxide (TiO2) market, spot prices were largely unchanged so far on Thursday, with several sellers in China away in the latter half of this week.
Workable levels and indicative prices were heard within the assessment range on 19 June of $1,780-1,900/tonne FOB (free on board) China.
According to one buyer, sellers said they will start offering TiO2 parcels again in July.
Meanwhile, the Asian polycarbonate (PC) import market was generally quieter ahead of the Dragon Boat Festival holidays.
Market sources also noted that the BPA import market in China was similarly quieter this week, and suggested that this was because the Dragon Boat holidays gave buyers and producers a shorter time period to negotiate deals.