News Code : 44815

Petrotahlil - Propylene supply in northeast Asia is tightening amid uncertain import demand from China, where two new propane dehydrogenation (PDH) units are due to come on stream in the near term.

Domestic demand in Japan, S Korea limits exports

SE Asia demand healthy

Two China PDH units may achieve on-spec output in mid-July

In South Korea, some traders are having difficulty buying spot cargoes off producers as a local downstream polypropylene (PP) maker has been buying up a fair bit of domestic propylene supply.

In Japan, domestic demand has recently increased as some producers are in the spot market to procure cargoes, resulting in fewer spot lots available for exports.

One producer was facing propylene shortage as it was running its cracker at lower rate to balance the ethylene side of its business.

In southeast Asia, demand is healthy for August arrivals, with the price gap with the northeast region narrowing.

This also meant that it was increasingly difficult for southeast Asian-origin propylene to find its way to northeast Asia.

In China, buyers are bearish for second-half August arrivals because they expect two PDH units to start producing on-spec propylene as early as mid-July.

The start-ups could lead to some lengthening of supply in east China, and exert price pressures on the domestic Shandong and import markets.

It is unclear if non-main port buyers are able to benefit from potential new supply from east China.

Source : ICIS

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