24 December 2009 03:35 [Source: ICIS news]
By Chow Bee Lin
SINGAPORE (ICIS news)--Polyethylene (PE) and polypropylene (PP) trade in China and southeast Asia looks set on a weak start next year and may only pick up momentum starting the second quarter due to restocking, industry sources said on Thursday.
Demand usually stagnates towards the Lunar New Year holidays, which fall on a February in 2010, while more supply would be available from new capacities coming on stream in Asia and the ?xml:namespace>
"The first quarter is not optimistic,” a South Korean polyolefins producer said.
"Importers were unlikely to stockpile before the holidays because the long-term outlook would be uncertain due to new supplies. Plastics factories in
The second quarter looks more promising when trade would regain pace as importers would likely replenish stocks, market sources said, with some expecting prices to strengthen on the back of high energy and feedstock values.
"I believe the market outlook will be stable to bullish if crude oil hovers around $75/bbl (€53/bbl) to $80/bbl and the US dollar remains weak," a southeast Asian PE producer said.
A tight cracker maintenance schedule in northeast and southeast Asia was expected to support feedstock values next year, market sources said.
Spot ethylene feedstock prices were assessed at $1,160-1,200/tonne CFR (cost and freight) NE (northeast) Asia and $1,200-1,240/tonne CFR SE (southeast) Asia in the week ending 18 December, according to global chemical market intelligence service ICIS pricing.
Spot propylene feedstock prices were assessed at $1,115-1,150/tonne CFR NE Asia and $1,050-1,090/tonne CFR SE Asia for the same period.
The market impact of new additional capacities, meanwhile, may just be limited in terms of dampening buying interests and may have been overrated by others, some industry players said.
"We’re not very concerned about the recently started up plants in the
"I’ve a feeling that the production problems in
Meanwhile, suppliers’ attempts to raise prices next year would face strong buyer resistance if downstream demand fails to keep pace with the price hikes, industry sources said.
"Polymers are already overvalued now and downstream end-users are resisting further price hikes. We are concerned that a bubble is developing in the plastics sector," said a source at a major trader in east
Benchmark PP injection and yarn and film grade high density PE were assessed at $1,140-1,210/tonne and $1,220-1,280/tonne, all on a CFR China/SE Asia basis for the week ended 18 December, according to ICIS pricing.
($1 = €0.70)
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