06 March 2008 04:54 [Source: ICIS news]
By Hong Chou Hui
SINGAPORE (ICIS news)--Asia’s petrochemicals industry is taking a cautious approach as US crude futures rose to a new high of nearly $105/bbl (€68.25/bbl), with the majority of players withdrawing to the sidelines, producers and traders said on Thursday.
Offers for propylene were scarce despite ample supply in northeast ?xml:namespace>
With crude and naphtha prices at record levels, cracker operators have begun to cut back operations, prompting traders to expect tighter supply in April and higher prices.
Limited reaction to the crude hike was seen in
Benzene prices were notionally assessed as stable at $1,070-1,080/tonne FOB (free on board) Korea, with no indications heard for prompt April cargoes, based on global chemical markets intelligence service ICIS pricing.
In the toluene market, bids heard for April loading slipped from $970/tonne FOB
Toluene prices were notionally assessed unchanged at $955-970/tonne FOB
The styrene market bucked the trend of caution in
Firming crude prices have also lowered production capacities at petrochemical facilities across
Despite the rise in naphtha costs, spot ethylene prices have been on a downtrend for the past few weeks partially due to an influx of
Oil prices firmed on OPEC’s refusal to increase output and a weakening US dollar while statistics from the Energy Inventory Administration (EIA) showing an unexpected drawdown in crude inventories further boosted speculative trades in the market.
While April NYMEX light sweet crude futures were trading at $104.52/bbl, up $5 overnight, a new trading record of $104.95 was recorded shortly after NYMEX closed.
April ICE Brent futures surged to $101.82 before settling at $101.64/bbl, up $4.12/bbl, representing a record settlement for Brent futures.
Market watchers, however, attributed the spike to speculative trades as demand had yet to peak with the US summer driving season still some months away.
Some downstream players, however, took a more optimistic view regarding the hike in oil prices.
“We can use it as a weapon in our price negotiations with customers. Even though it will take some time before the higher crude futures impact our offers, it’s better to start factoring this into our offers because our feedstock costs may go up,” an executive from
He added that demand for PET bottle chips was anticipated to rise during the summer peak season and the Beijing Olympics in August.
($1 = €0.65/ CNY7.10)
Steve Tan, Kew Jiahui, Clive Ong and Mahua Chakravarthy contributed to this story.
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