23 September 2009 07:25 [Source: ICIS news]
Correction: In the ICIS news story headlined "Asia petchems trade dwindles ahead of China October holidays" dated 23 September 2009, please read in the final paragraph ...Asia's second biggest economy... instead of ...Asia's biggest economy.... A corrected story follows.
(adds ninth paragraph, recasts 10th paragraph)
SINGAPORE (ICIS news)--Petrochemicals trading in Asia has significantly slowed, accompanied by declines in product prices ahead of the long holidays in China, industry sources and analysts said on Wednesday.
The important Chinese market would be closed for more than a week for the National Day celebrations from 1-8 October, with little hopes of a strong pick-up in demand post the holidays, they said.
Propylene prices fell below the key $1,000/tonne (€680/tonne) CFR (cost and freight) China level for the first time since July due to strong buyer resistance ahead of the holidays.
Meanwhile, spot deals in Asia’s benzene and toluene markets also declined as most requirements during the holidays had been covered by term contracts, market players said.
Sufficient supply of the two aromatics products dampened regional prices, with discussions in the market focused on material for November and December shipments, sources said.
Market participants said they were hoping prices had bottomed out, which would make a rebound possible after the
At 12:00pm Singapore time (0400 GMT), benzene offers were at $765/tonne FOB (free on board)
Toluene CFR China prices fell $20-40/tonne over the last two weeks to $760/tonne CFR China on Wednesday.
On the propylene glycol market, meanwhile, trades have also slowed but prices have been on an uptrend since August due to tight supply, industry sources said. Material sold within China were priced at CNY10,300-10,500/tonne ex-tank this week.
Trades in the regional styrene butadiene rubber (SBR) market were crawling in the run-up to the October holidays, industry sources said.
A Korea SBR producer was hopeful that traders and buyers would come back in the second half of October to replenish inventories.
“Chinese buying interest is limited now due to the upcoming holidays,” the producer said.
The Korean SBR producer offers non-oil grade 1502 SBR for October delivery at $2,100/tonne CFR China, up $100-200/tonne from current September spot prices.
Most petrochemical product prices have recovered from the slump in late 2008, primarily driven by
Values of the three fibre intermediates had been held up by cost pressures until early August when they started heading south.
“Petrochemical demand will slow month-on-month in the fourth quarter on seasonal and inventory factors. Many companies have built enough stocks when prices were low,” said Fang Jun, Shanghai-based analyst at Essense Securities.
Some players may be overflowing with inventory with no outlet to dispose them off, analysts said.
“Too much inventory will curb the demand for petrochemical products in the following months,” said Wang Xixin, a Wuxi-based analyst at Guolian Securities.
“The market outlook is not easy to figure out,” said Wang.Most petrochemical players look to
($1 = €0.68)
With additional reporting by Steve Tan, Ong Sheau Ling and Helen Yan
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections