News Code : 45889


Petrotahlil — Volatility in Asian petrochemical upstream markets likely a key for price direction in downstream markets, especially as trade activity begins to taper down ahead of the Lunar New Year holidays in China.


** China propylene is expected to stay stable in the week after restocking is mostly completed ahead of Lunar New Year holidays.

** The South Korea market is poised to receive support from demand for spot materials, with Hanwha Total's new downstream polypropylene unit expected to start in second-half February.

** Taiwan's state-run CPC is aiming to start its residual fluid catalytic cracker Feb. 8. The steam cracker has the capacity to produce 450,000 mt/year of propylene.

Polypropylene (PP):

** Asian polypropylene is likely to slow down ahead of the Lunar New Year holidays in China from Feb. 11-17.

** Offers from international sellers to China stayed firm, in view of currently more attractive spot markets like Turkey, Latin America, the US and Africa.

** South Asia demand could be robust while supply is likely to remain tight amid planned shutdowns.


** The Asian toluene market witnessed a demand-driven surge in the week ended Feb. 6, and an extension of an upward trajectory ahead will depend on China's trading interest ahead of Lunar New Year holidays.

** Price movement in associated markets such as benzene will also be eyed keenly to determine toluene prices in the truncated trading week of Feb. 8, sources said.

Isomer-grade Mixed Xylenes (MX):

** MX likely to continue tracking crude oil and paraxylene prices, both of which recently have shown firmness.

** MX prices hit more than a one-year high of $636/mt FOB Korea on Feb. 5 from firmer upstream values.

Orthoxylene (OX):

** Orthoxylene prices may see support in the week ahead from increasing domestic prices of both OX and downstream phthalic anhydride in China.

** China's Sinopec raised domestic prices of OX in South, east and north China by Yuan 300/mt to Yuan 5,000/mt on Feb. 7. The new price is equal to about $670.50/mt on an import-parity basis.

** Sinopec's price increase comes on the back of fast rising feedstock prices, which has also driven up international OX prices.


** Recent bullishness in Asian styrene may extend on the back of price gains in both upstream and downstream markets.

** Trading activity could slow down as downstream producers begin to reduce production rates or shut down for the long holidays in China.

** Current inventory levels, nonetheless, remains manageable and postholiday demand expectations from market participants remain fairly optimistic.

Purified Terephthalic Acid (PTA):

** PTA market fundamentals could remain largely stable.

** Price movement in upstream PX markets to drive PTA direction.



** Tighter supply in Asian acrylonitrile market after production outage in the US has reduced spot supply to Asia.

** Cornerstone, a key producer in the US, declared force majeure in the week ended Feb. 6. The company sells 6,000-7,000 mt acrylonitrile to India each month.

** Indian buyers are expected to compete with other buyers in Asia for cargoes as a result of the supply disruption.

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