20 May 2010 07:32 [Source: ICIS news]
By Pearl Bantillo
SINGAPORE (ICIS news)--Petrochemical prices in Asia plunged this week, partly due to destocking activities, with a strong likelihood of further declines amid high inventory levels and prevailing poor market sentiment, market players said on Thursday.
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“The financial crisis or uncertainty in the EU … might have an impact on consumer confidence that would then impact the demand on some of the products,” Lynne Lachenmyer, senior vice president at ExxonMobil, told ICIS news last week.
Propylene spot prices fell below $1,300/tonne CFR (cost and freight) NE (northeast) Asia level this week, with offers at $1,250-1,280/tonne CFR China, due to deteriorating conditions in the derivative polypropylene sector, market sources said.
Traders were willing to offload June propylene cargoes in the low $1,200/tonne CFR China levels, they added.
“We don’t want to import any more propylene because prices have come off so sharply and we don’t know how much more they will drop,” said a PP producer in
Local prices in
The polyethylene market, meanwhile, was plagued with high stocks, with Chinese petrochemical majors PetroChina and Sinopec currently holding a total of 750,000 tonnes of the material, industry sources said.
The stocks were just a quarter short of the peak of 1m tonnes in August 2008, before the financial crisis struck.
Fearing a repeat of the crisis scenario in September 2008, when polyolefin prices had a $100-200/tonne weekly decline, traders are currently rushing to liquidate cargoes, even at a loss, market sources said.
The cargoes were mostly of
Some Chinese traders were offering Iranian film-grade high density polyethylene (HDPE) at $1,170-1,180/tonne CFR China this week for prompt lifting at the bonded warehouse, market sources said.
Benchmark HDPE was assessed at $1,180-1,240/tonne CFR China last Friday, down $20-30/tonne from a week earlier, according to ICIS pricing.
Meanwhile, weak demand caused methyl tertiary butyl ether (MTBE) prices to slip $10/tonne to $780-800/tonne FOB (free on board)
Suppliers were banking on a seasonal pick-up in gasoline consumption late this month to early June - the driving season in the northern hemisphere - to buoy the MTBE market, market sources said.
MTBE is used in gasoline blending.
But as the current economic situation in the US and Europe does not bode well for summer travel, gasoline demand may not be as strong as in the past and provide no reprieve for MTBE, market sources said.
“Many people are optimistic that once the West starts to look for cargoes again, MTBE prices will recover, but I don’t know now when this is going to happen,” said a trader.
The wave of price declines also hit the Asian paraxylene market, with spot values tumbling near seven-month lows at $960-975/tonne CFR (cost and freight)
Styrene butadiene rubber (SBR) values followed the southbound direction, with non-oil grade 1502 product falling by $150/tonne to $2,200/tonne CFR (cost and freight) in southeast Asia and
Players in the polymeric mono di-isocyanate (PMDI) and toluene di-isocyanate (TDI), meanwhile, were wary of possible influx of lower-priced cargoes from
“I had just received an [TDI] offer from a
Spot TDI prices were at $2,850-2,880/tonne CFR CMP/Hong Kong on 19 May, according to ICIS pricing.
“The depreciation of the euro currency gave European sellers incentives to offer at a lower level, which may weigh down the market,” said a key supplier based in
With additional reporting by Chow Bee Lin, Loh Bohan, Ong Sheau Ling, Peh Soo Hwee, Gabriela Wheeler and Helen Yan
($1 = €0.81, CNY6.83)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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