Published on November 25, 2014
Asian petrochemical prices have fell steeply in the midst of declining crude values on the back of rising woes about global growth and demand. NYMEX crude fell by 6 cents to $81.78/b on October 15, while ICE November Brent slipped $1.26 to $83.78/b, a four-year low.
Asian paraxylene also slipped $16/mtday on day to be assessed at $1, 066.50/mt CFR Raiwan/China October 15 amid a sluggish crude market and weak demand. Asian PX prices have been declining since September as a result of weak feedstock naphtha prices as well as new PX plants, including ONGC Mangalore Petrochemical Limited’s 900,000 mt/year in India and Jurong Aromatic’s 800,000 mt/year plant in Singapore. The lower naphtha prices will likely lead to a rise in operation rates at reformers which in turn will result in increased PX supply.
Naphtha slipped $33/mt day on day to be assessed at $710.63/mt CFR Japan October 15. The downstream PTA market has also been sluggish, which has pulled down PX. Improved operating rates at PTA plants have not helped feedstock PX prices due to weak demand. The higher PTA runs has instead increased PTA supply, thereby lowering its price.
FOB Korea benzene was assessed at $1, 075/mt- a 27 month low. Asian benzene has been on a downward spiral since mid-August as a result of lesser demand from the US and increased cargo arrivals from Asia as well as weak downstream styrene monomer and phenol demand.
The falling crude prices also put pressure on the Asian benzene market, making the FOB Korea marker lose over 11 per cent of its value, and it was assessed at $1, 198.50/mt October 8, compared with $1, 075/mt October 15.
Asian styrene monomer prices have also slipped as a result of poor demand from the Chinese construction sector. The FOB Korea marker was assessed at $1,398.50/mt and CFR China at $1,425.50/mt on October 15.
The FOB Korea toluene marker declined by $16/mt to be assessed at $951/mt as a result of lower crude prices. Toluene demand in China has slipped on the back of difficult market conditions like inexpensive gasoline blendstock alternatives, limited credit availability and sluggish economy.
