Petrotahlil — Asia's petrochemical markets are likely to be mostly bullish in the week staring Nov. 16 as propylene, butadiene and acrylontrile are poised for firmer support following the unexpected shutdown of major plants. Others such as monoethylene glycol are likely to be less bullish as demand remains hampered by COVID-19 and end-users eyeing wider discounts.
The propylene market is slated to receive more support this week as South Korea's LG Chemical plans to delay the restart of its naphtha-fed steam cracker in Yeosu to January 2021, after it was shut Nov. 5 due to a fire in the control room.
The delayed restart will reduce the supply of propylene cargoes to China, the biggest buyer of propylene.
The steam cracker is able to produce 550,000 mt/year of propylene.
Asian butadiene remains tight in the week starting Nov. 16 amid persistent shutdown of butadiene plants in South Korea. Market participants are closely monitoring downstream synthetic rubber plant operations as the recent ramp up in butadiene values cause margins to narrow.
The acrylonitrile market is expected to be supported this week due to the unplanned shutdown of major plants in the region.
South Korean Tongsuh Petrochemical, an affiliate of Asahi Kasei Corp., shut its 265,000 mt/year No. 4 acrylonitrile plant at Ulsan on Nov. 6. The producer did not provide a date for its restart.
Asian polyethylene prices rose due to higher crude values on optimism over the development of a COVID-19 vaccine, market sources said. HDPE prices in South Asia (India) market continued to rise in the week to Nov. 11 on the back of higher demand amid tight supply in the region. The firmness in the market can also be attributed to the acute shortage of containers and increasing freight rates, market sources said.
Asian polypropylene is likely to stay supported due to healthy Chinese inventories, firm Indian demand, limited spot offers for dollar-denominated cargoes and the weak US dollar in the week starting Nov. 16.
Nevertheless, some customers find it challenging to transfer high PP cost to downstream finished goods, and prefer to take a wait-and-see approach as there is no urgent need for replenishment.
The total PP and PE inventories of two major Chinese manufacturers was reported at around 680,000 mt as of the morning of Nov. 16, a market source said.
PURIFIED TEREPHTHALIC ACID
Asian purified terephthalic acid fundamentals are expected to remain mixed within and outside of China.
Market sentiment remains bearish amid high stocks and new startups expected in early 2021.
Meanwhile, Indian customers are actively seeking PTA cargoes from Northeast Asian producers amid a shortage in domestic supply. The limited availability of containers and soaring freight costs have made it challenging to conclude spot deals.
Asia's monoethylene glycol end-users were hopeful they can achieve larger discounts on expectations of weaker demand due to the second wave of coronavirus-related restrictions, growing unemployment and expectations of a worsening macroeconomic picture. MEG prices fell on Nov. 13 on lackluster demand and tumbling energy values.
With the transition into second-half December and first-half January trading laycans, participants in the Asian toluene market were mostly focused on covering requirements for January, while weighing against the potential resumption of cracker unit operators' activities by the next quarter. Participants are also expected to be preoccupied with following through discussions for next year's toluene term supply, as several producers plan for the volume ahead. FOB Korea toluene physical assessments averaged $422.60/mt from Nov. 9-Nov. 13, Platts data showed.
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