Published on May 24, 2017
There has been persistent weak demand and weakening of prices in petrochemical market in Asian countries this year. Asian markets have been the poor performers in international market in petrochemical segment. The downward in this segment was prominent due to slacking of crude values in international market. This in turn led to weak demand in the downstream segment. The major petrochemical feedstock naphtha closed at $453.50/tone CFR last week in Japan, down from the average of $491.75/tone CFR Japan around the same time last month.
Crude prices had declined in first week of May to its lowest level since November 201 before the OPEC-led output cuts having concerns about growing shale oil production in the US, even as OPEC and non-OPEC members have been keeping to their output cut commitments.
Price movements of Benzene, aromatics like Toluene and in particular Styrene Monomer are significantly influence by crude prices.
Demand for aromatic products has been plunging significantly since last few weeks. Considering Benzene, last week prices closed in the range of USD 750-770/MT which is lowered by USD 70-80/MT in last one month. The Toluene market has seen the consistent fall in demand in two crucial markets of Asia i.e.China and India. The other products like Para Xylene has been witnessing the similar trends.
Prices are under pressure with fresh supply coming from India, where Reliance Industries’ new 2.25m tonne/year PX unit in Jamnagar has started loading cargoes since end-April – both contractual and spot volumes – to China and southeast Asia.
In the olefins market, ethylene prices in northeast Asia are weighed down by weak downstream conditions and expectations of increased regional supply in the coming months.
Market players have austere viewpoint on Chinese downstream market due to tightening of credit conditions. Production cuts at stand-alone plants could become more prevalent if sales and margins failed to improve.
Propylene prices may come under pressure despite recent gains, with downstream polypropylene (PP) producers still reeling from weak sales and high inventory levels.
In the methanol market, the outlook continue to remain diminish for the rest of May as buyers have ample supply, resulting in thin spot demand for the material.
This all weak trends have been in focus due to weakening of crude values in international market and oversupply of crude.
